4.   Funding and Governance - (March 2019)

4.1                  Current financial counselling funding and governance arrangements

4.1.1              Current funding arrangements

The majority of financial counselling services are funded by Commonwealth, state and territory governments. In addition, there are some providers who receive funding from industry and philanthropic institutions. The funding composition (source, amount and timing) differs across jurisdictions.

Commonwealth funding

The majority of Commonwealth funding for financial counselling services is provided through:

·      The Department of Social Services (DSS) which provides approximately $18.6 million per annum as part of its Financial Wellbeing and Capability activity including for:

–    broad financial counselling and financial capability services; and

–    supporting FCA to coordinate the National Debt Helpline.

·      DSS also provides targeted support as part of the Money Support Hubs and problem gambling support services.

·      The Department of Agriculture and Water Resources provides approximately $19.5 million funding annually for the Rural Financial Counselling Service. This funding is provided for the delivery of free financial counselling services in farming communities to eligible clients who are experiencing, or at risk of, financial hardship.

State and territory funding

Governments in all states and the Australian Capital Territory (note that no funding is provided by the Northern Territory), support a variety of financial capability and counselling initiatives. It is estimated that the quantum of funding provided by the state and territory governments is in the order of $26 million per annum for generalist financial counselling services.

Industry and philanthropic institution funding

Some financial counselling service providers receive contributions from industry and philanthropic institutions. Relationships and funding between industry, philanthropists, and financial counselling service providers may be initiative-based or ongoing. Philanthropic funding streams in the sector include:

·      the Wyatt Trust’s ongoing work on financial wellbeing initiatives in South Australia;

·      Wesley Mission’s extensive network of corporate donors – supporting, inter alia, the Wesley Financial Counselling Services;

·      Kildonan CareRing administered by UnitingCare which provides support for financial counselling and is financially supported by a range of industry partners including banks, energy and water companies. CareRing includes utility home visits which assist consumers in reducing usage and associated costs; and

·      The Salvation Army financial counselling services include a mobile phone application developed to provide tips on money management and connect consumers to support services.

4.1.2             Existing governance arrangements

Governance and coordination arrangements within the sector vary both within and between jurisdictions. Discussions with both government and non-government stakeholders indicated that sector participants are of the view that there is room for improvement in the current arrangements for both supporting and delivering financial counselling services.

The sector’s peak body, FCA, plays an important role in increasing the visibility of financial counsellors at a national level and operates within a federated structure of state bodies. Critically, given existing fragmentation in the sector, FCA has historically played an important role in highlighting the often complex interactions between current service delivery initiatives and identifying areas for improvement in the sector. Part of FCA’s role also includes coordinating the National Debt Helpline, which is currently delivered by eleven state‑based organisations to provide national coverage.

To meet the needs of consumers, it is clear that the sector requires more structured coordination and governance frameworks. Enhanced coordination frameworks may allow existing and future resources to be coordinated more effectively.