The Victorian government this week announced it would ban all banking schemes from operating in public schools from 2021.
This includes the controversial Dollarmites program, run by Commonwealth Bank, which teaches primary school children to save money and develop banking habits. Often, this is done by opening an account with the bank.
The Victorian government will replace these bank-led programs with school-led financial literacy programs.
Given the lack of evidence school banking programs lead to better financial literacy, their removal won’t have much impact on children’s learning. In fact, it might be the impetus schools need to take financial literacy education more seriously.
How financial literacy has changed in Australia
Many families and school communities participate in school banking simply because it is a tradition. In 2019, the ABC reported nearly two-thirds of the nation’s schools participate in school banking programs. The most well known is delivered by the Commonwealth Bank.
The incentive of cash payments to schools has contributed to the survival of the schemes despite a lack of evidence they do, in fact, improve children’s financial literacy skills. It was revealed in 2018, the Commonwealth Bank had paid a total of almost $400,000 to state schools across Queensland in a bid to encourage more students to join its banking program the year before.
At best, such programs promote saving habits, which can be taught by parents. At worst they are an administrative burden and a potential disruption to the flow of teaching and learning in Australian classrooms.
The Commonwealth Bank established its school banking program in 1931 to teach “money-management” skills to primary school students. But life has changed significantly since then.
Along with basic money management, students leave school needing to understand the financial implications of subscriptions to services such as gym memberships, mobile phone plans and even TV streaming services. They need to understand credit card debt, buy-now-pay-later schemes, student loans, superannuation, taxation and of course the traditional lending structures of personal loans and mortgages.
Where is financial literacy in the curriculum?
It has long been acknowledged financial literacy should be part of the school curriculum. Most recently, this has been supported by the federal and state governments in the 2019 Alice Springs (Mparntwe) Education Declaration. The declaration specifically mentions the importance of developing strong financial skills among Australian students.
While the Australian Curriculum doesn’t have an explicit financial literacy curriculum, it provides a range of resources to help teachers implement financial literacy at all levels of schooling.
One of these resources is the Consumer and Financial Literacy Framework, which includes a strong rationale for financial literacy education in Australian schools, along with guidance on the progression of learning from the first year of school through to senior secondary.
Financial literacy education is embedded in the curriculum in two ways. First, it appears explicitly in several subject areas: mathematics, economics and business.
Within maths, children learn about the value of money. They learn to:
- solve problems involving money
- manage money by creating budgets
- explore and calculate percentage discounts
- work out the best value when making purchases
- choose financial products and solve problems that involve simple and compound interest, and profit and loss.
In economics and business, students learn how to make responsible and informed decisions about consumer issues, money management and assets.
Secondly, the Australian Curriculum General Capabilities and Cross Curriculum Priorities describe the overarching skills, knowledge, behaviours and dispositions necessary for the development of successful and active citizens.
Financial literacy is embedded in each of these two structures and teachers have the opportunity to use relevant learning tasks. For example, primary students in one study borrowed money from their school principal to design and conduct a market stall.
To do this, they had to come up with a business plan, understand their break-even point, and market and sell their products to other students at the school. The students then had to repay their debt to the principal before deciding on how to spend their profits.
This rich experience addressed several aspects of the maths curriculum while teaching the students about important financial literacy concepts. It was also authentic and engaging. It provided students with a sense of agency when they were able to use their profits to buy and donate Christmas gifts for needy children.
Do we need to do more?
While financial literacy is embedded into the curriculum, there is more work to be done inside and outside schools. Schools need to make sure financial literacy is explicitly taught in conjunction with key subject areas. A way to ensure this happens is to have it made more explicit in the Australian Curriculum.
Parents influence their children’s financial behaviours. Unfortunately we can’t assume all parents have sound financial literacy, nor can we assume all teachers do.
Financial literacy education for the broader community is critical if we are to ensure parents model positive financial behaviour to their children. ASIC’s MoneySmart website is a good place for parents to improve their financial literacy.
Likewise, teachers must have the opportunity to engage with professional development to increase their personal financial capabilities, as well as their ability to incorporate financial literacy into their teaching.