Financial distress is now Australia’s most significant welfare issue. Despite Australia being the ‘lucky country’, we know that before the COVID-19 crisis –
- 11% or 2.1 million Australians were experiencing severe of high financial stress
- Only 50% of adults reported having 3 or more months of savings
- 1 in 5 adults feel over-indebted, only just managing to keep up with their repayments.
The impact of the COVID-19 crisis is not being felt equally across our communities, industry sectors or regional economies. Economic security issues such as casualised employment and housing have become glaring public health issues.
It has never been more important for organisations and leaders across all sectors to understand the impact of financial stress and hardship on people’s lives and be able to identify strategies to promote financial resilience and wellbeing. It is good for business, and it is good for the community.
FIAP Program Background
The FIAP Program was launched in 2016, as part of the Australian Government’s G20 commitment to develop a national Financial Inclusion Action Plan. Today, FIAP is a national and place-based network of over 50 organisations, who have made public commitments to take strategic and practical actions that will improve the financial wellbeing of their customers, employees, business, and community partners.
Between the launch of the first Action Plans in 2016 and the FIAP Program Evaluation conducted by CSI in 2019, these organisations undertook over 630 actions including:
- $1.2M invested in closing the gender pay gap for 350 women
- More than 1,000 employment opportunities for under-represented groups including people with a disability
- 38 organisations implementing domestic violence policies including awareness training and support.
FIAP aims for mutual benefit for all stakeholders
Good for Customers
Good for the Community
Good for Participating Organisations
Financial Inclusion and the Sustainable Development Goals
Financial inclusion is not an end in itself, but a means to an end, offering pathways to economic opportunities which enable people to realise their full potential. Across the globe, policymakers are also recognising that financial inclusion is a powerful engine of progress, and a catalytic tool to advance human development.
Actions undertaken as part of the FIAP program contribute to 12 of the 17 Sustainable Development Goals (SDGs 1-10 and 16-17) which are associated with reducing inequalities and promoting inclusive growth. For more detail, refer to Good Shepherd Microfinance's Submission to Senate Inquiry into the Sustainable Development Goals March 2018.
|1. Savings help families escape poverty as they absorb financial shocks, smooth consumption, accumulate assets and invest in health and education.||6+7 Access to clean and affordable utilities including water and energy is a basic necessity; users must also be treated fairly when faced with financial hardship.|
|2. Farmers with access to finance produce better harvests, and are able to be more resilient to external shocks.||8+9 Lack of access to finance deepens income inequality, slows economic growth, creates poverty traps and reduces ability for SMEs to create jobs and growth.|
|3. Access to finance enables people to better manage medical expenses and rebound from health crises.||10+16 Income inequality creates instability and slows economic growth; access to finance helps people to get assistance when faced with crises.|
|4. Savings help families plan for and manage education expenses, building human capital which fuels economic growth.||17. Collaboration and collective action across multiple sectors is needed to achieve system change.|
|5. Financial services help women assert economic power, and have greater control over their finances such as prioritising spend on household necessities.|