The words of the nineteenth-century novelist Charles Dickens (1812–70) in the Tale of Two Cities have a freakish resonance with the dramatic times we face today. He wrote:

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us …

How well is the education sector preparing students to meet the challenges of market volatility and waning consumer confidence in 2008? In fact, a thoroughly developed financial literacy strategy is currently being implemented throughout the Australian school system.

Background

The current school initiative emerged from a 2004 national inquiry into how Australians manage their money in the face of the increasing choice and complexity confronting consumers.

The Australian Government established the Financial Literacy Foundation within Treasury in 2005. The Foundation focused on raising awareness of consumer issues and encouraging all Australians to better manage their money. It drew on research to date which showed the need for a focus on basic building blocks:

• How to prepare and use a budget, set goals and plan for the unexpected
• How to manage debt and have control over loans and credit
• How to make money work for you – saving and investing
• How to plan for retirement
• Where to find information and quality advice.

The Foundation developed three education strategies, covering school education, higher education and VET, and workplaces. This article focuses on the school education strategy and its implementation.

At the end of 2005, a National Consumer and Financial Literacy Framework was jointly endorsed by the Catholic, Independent and Government school sectors and fair trading agencies in all states and territories, under the auspices of MCEETYA. The Framework defined consumer and financial literacy as the ‘application of knowledge and understanding, skills and values in consumer and financial contexts and the related decisions that impact on self, others, the community and the environment’. The Framework, to be integrated into all K–10 curriculums by 2008, applied across English, Maths, Science, Civics and Citizenship and Information and Communications Technology.

In 2006 and 2007 the Foundation consulted extensively with stakeholders to identify what teachers, professional associations and systems needed in order to implement this Framework. In 2007–08 the Foundation partnered with Curriculum Corporation and the Department of Education Employment and Workplace Relations (DEEWR), through the Australian Government's Quality Teaching program, to develop a Professional Learning Package which would build teacher and system capacity.

July 1, 2008 saw the functions and work of the Foundation move to the Australian Securities and Investments Commission (ASIC).  In 2008–09 ASIC is partnering with Catholic, Independent and Government schools and professional associations in all states and territories for the support and the rollout of professional learning nationally.

A forward work plan will see ASIC partner with schools, business and community in 2009–11 to implement a Principal/School Leader strategy.  The focus will be on promoting a whole-school approach to consumer and financial literacy by connecting parents, business and the community to what is already happening around financial literacy in schools. 

Professional learning materials for facilitators and teachers

Currently, teacher training packages and a website are helping deliver the Consumer and Financial Literacy program. The website includes detailed guides for facilitators and classroom teachers. Topical areas include budgeting, banking, credit cards, mobile phone plans and superannuation.

Consumer and Financial Literacy is to be integrated across all learning areas in schools by broadly the focusing on four areas:

• In lower primary – Understanding Money (including needs and wants, the nature and functions of money, income and expenditure, goods and services, and savings)
• In upper primary – Consumer Education (including consumer behaviour and protection, scams, ethical and sustainable consumption, e-commerce, financial institutions and advertising)
• In lower secondary – Personal Finance (including budgeting, expenditure, loans and interest rates, investing, debt management, protecting yourself and your assets)
• In upper secondary – Money Management (including financial planning, enterprise initiatives to generate wealth, wealth building, assets and liabilities, protecting your money, insurance, taxation, superannuation, credit and obtaining financial advice).

These areas of study are stepped, building on each other and mutually interdependent.

Consumer and financial literacy as a school responsibility

It is widely accepted and understood that parents are not always comfortable discussing their finances with their children. Many are themselves struggling with their credit cards and debt. Schools and educators have traditionally demonstrated their capacity to foster cultural change and create good habits of mind. Educators know how to teach students to think critically, reflect, develop and apply deep knowledge and understanding – with a focus on student wellbeing and a student's effective participation in and contribution to society.

The school strategy and its implementation is a significant catalyst for generational change. It marks a definite shift in thinking and attitude, acknowledging consumer and financial literacy as a core life skill for all young people. While contributing to a young person's wellbeing it will also contribute to the wellbeing of society.

Historically, consumer literacy and financial literacy were taught as electives in commerce, economics, accounting and business in the senior years, exposing only a small percentage of students to this learning and skill development. The new framework gives financial literacy a place in the education of every Australian student.