In a statement from the office of Minister for Revenue and Financial Services Kelly O’Dwyer, Treasury has announced that a new not-for-profit body would be formed to advance financial literacy for vulnerable groups such as women as well as younger and older Australians.
The new government-independent body, anticipated to be the biggest of its type in the country, would be in charge of managing and distributing the $40 million in funds collected from the settlement agreements between ASIC and major banks NAB and ANZ.
NAB reached an agreement with the corporate regulator to fork out a $50 million penalty at the end of October last year, with ANZ following shortly after with a similar sum in mid-November 2017.
CBA also reached an in-principle settlement agreement with ASIC earlier this month and — subject to Federal Court approval — has agreed to pay a $25 million penalty, $15 million of which will go to a financial consumer protection fund.
Where ASIC accepts enforceable undertakings from other firms, it may channel some funds into the new body.
Ms O’Dwyer said the not-for-profit body would be a “game changer” and a “lasting institution that will support consumers and build financial capability for all Australians no matter what their circumstances”.
“It will become Australia’s peak body in championing financial literacy and capability amongst Australians,” she said.
“It will use funds received as a result of corporate wrongdoing to educate and empower Australian consumers of financial products and advice.”
The body will also aim to be given deductible gift recipient status so it may receive tax-deductible donations from members of the public as well as administer grants and “improve capabilities amongst Australians of financial products and services,” the statement said.
Ms O’Dwyer added that she wanted the new body to “be to financial literacy and capability what beyondblue has been to mental health”.
Paul Clitheroe, ipac founder, has been selected to chair the board of the new body, which will also count director of the government’s Financial Literacy Board Elaine Henry and Australian Defence Force Financial Services Consumer Centre independent chairman Robert Brown among its board directors.
