Amanda Rishworth (Kingston, Australian Labor Party, Shadow Parliamentary Secretary for Health) Share this | Link to this | Hansard source

I rise today to speak about the importance of Commonwealth funded financial counselling services within my electorate of Kingston. Federal funding enables local organisations in my electorate, such as Anglicare and UnitingCare, to provide essential services to people experiencing financial difficulty. I believe this funding is essential to helping those facing extreme financial hardship.

The Commonwealth Financial Counselling program was introduced by Labor in 1990 in response to an overwhelming demand from individuals and families seeking financial assistance. The program was aimed at assisting those most at risk of financial exclusion and disadvantage. The first increase in funding to this program came when Labor was returned to government. We recognised that the existing funding was inadequate to support the demand for services. We strengthened the program in 2008 by increasing funding for financial counselling services, increasing the funding from $2.5 million to over $20 million per annum. This enabled local organisations to continue to provide services desperately needed for the local community.

I am calling on the Abbott government today to commit to continue to provide funding for these essential services. There is huge uncertainty about the ongoing federal funding for this program. Local organisations have contacted me with their concerns because they have not been told whether or not the Abbott government intends to continue with Labor's commitment to providing this essential funding.

Debbie is one of those financial counsellors in my electorate who provides essential financial counselling services to people in need. Debbie is concerned that the financial service providers may not know until just a few weeks before their contract expires whether funding will continue. This has placed stress and pressure on both the staff and clients, who are faced with uncertainty into the future. Financial counselling is so important for my local community. People often seek free advice when they feel they have no other options left to them. Like Debbie, I am concerned that if the Abbott government chooses to cut this essential funding, many people and families in my electorate will not have access to the services they desperately need.

Financial counsellors like Debbie help people experiencing financial difficulty make informed choices by providing free and, importantly, independent and confidential support and advice. Financial counsellors provide support right across many areas, whether it is negotiating with creditors, advocacy, budgeting or referrals, just to name a few.

I understand that circumstances like sickness, family breakdowns, unemployment and overcommitting on credit can lead to financial difficulty and the need for this assistance. Financial difficulty can have a severe impact on one's physical and mental health and place a strain on relationships. Providing this support is really essential to preventing further issues. Financial counsellors also play a critical role in preventing people from getting into further financial difficulty. I know the work that happens in my electorate really does shine a spotlight on some of the common traps people can get into, warning people of these traps. As many people would know—and I have spoken about it in this place before—one of these is the large retail stores that offer interest-free deals for large household items. With these interest-free deals, people often get a store or credit card. There is no obligation. They get told they do not have to make a payment for 24 or 48 months; they have this interest-free period. But of course, after that time expires, huge interest rates apply. Some are even up to 30 per cent. There are a lot of difficulties people can find themselves in with these and other such schemes. These include miscalculating or forgetting when the interest-free period runs out because there is no legal obligation to remind the buyer of when the interest-free period is to run out; paying only minimum repayments, which sometimes is not enough to pay off the full purchase price before the interest-free period runs out; not realising that some contracts do not allow you to make early or extra repayments; and not understanding the additional fees such as establishment fees, monthly service fees and late payment fees that actually arise.

Interest-free deals may be an attractive option for people experiencing financial difficulty. However, financial counsellors are in a good position to alert and educate people about some of the potential pitfalls that can happen. As we go into the next financial year, I call on the Abbott government to continue their ongoing funding for financial counselling services to provide certainty for this important program and ensure that the local organisations that support those in need are also supported.