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Financial Counselling

Community Affairs 24 February 2011

Senator SIEWERT—I have a number of questions. First I will go to financial counselling. I understand that the additional resources for financial counselling run out this year. I also understand that there is a great deal of concern about what happens after this. Have you had that representation from financial counsellors and in particular in light of the situation that is obviously now facing people in terms of floods?

Ms Carroll—I could probably just make an opening remark to that and then let Mr Riley give you the detail of that. Clearly anything in terms of future funding is a matter that we cannot speak about.

Senator SIEWERT—That is why I was trying to be careful.

Ms Carroll—Obviously we are not in a position to provide any advice on that. However, we are certainly aware and we are monitoring closely the issue in particular for service providers in the flood and cyclone areas, and getting feedback from them about the demand. Earlier in the day someone asked a little bit about our on the ground response to floods. Our state office manager in Queensland, Mr Keith, is on a subcommittee with the Queensland government and is also working on the broader human and social issues around the floods and the cyclone, but also through the Queensland office and through here in Canberra we have been making sure we have close contact with all the service providers in Queensland to understand what are the key issues.

Senator SIEWERT—I do appreciate I am walking a fine line with respect to what is in the budget. What analysis have you done of which areas have been accessing the services? Have you looked at it in terms of any modifications that you might make to the program, what are people finding of value and how many people are coming back for further help?

Mr Riley—That is a large part of what we have been doing. First, in the broad sense, we know that on or around 80 per cent of our clients through the Commonwealth Financial Counselling service strategy appear to be income support customers as their primary source of income. The remaining 20 per cent are really driven by life events that occur, so a diverse range of things including relationship breakdown, maybe a complex debt issue, or a number of things. In terms of the way in which we conduct our service delivery, or we fund our service delivery to be undertaken, there are probably two important things that I need to mention. Primarily, we fund face-to-face financial counselling through community organisations. We also provide support to those counsellors in various ways, including resource support, professional development, resourcing and the like. We also make available guides and publications that may be of value to them. We have worked with the Child Support Agency around the Me and My Money project, for example. There are a range of things on that front.

The other thing I would mention is that we also purchased the 1800 007007 number, which is a free national access point for financial counselling services. It will connect through to the telephone financial counselling service in each state and territory. When we have an event like we have had with the floods and cyclone, that number is publicised quite widely. Irrespective of whether they can deal with the person’s particular situation on the phone at that time, they can connect them with their nearest face-to-face financial counselling service. There is an issue—it is not a line, as such, but there is a point at which the complexity of the case is more difficult to deal with over the phone.

In terms of the situation with the floods and the cyclone and the recovery effort, history tells us that the financial counselling issues tend to emerge a little bit later. They tend to be around dead issues and where people are unable to go to work for an extended period and so forth. While we are in the process of negotiating with four services in the flood and cyclone affected areas to disseminate what remaining funds we have in the program for this financial year, we are very mindful that over the longer term it is—

Senator SIEWERT—Which is one of the reasons why I asked the question. There are issues around whether the demand still exists for increased services when this program finishes, just generally, and then, of course, on top of that is whether increased demand will be coming out of the floods into the future. I am probably asking for an opinion, but if the program does finish, what will be the unmet need both generally but also with respect to the floods? Does that make sense?

Ms Carroll—We understand the question, and obviously we are in the process, especially around the floods and the cyclone as I said, of monitoring closely and getting feedback from providers. As Mr Riley said, we have some understanding historically of what has happened with respect to other big events as to when these things impact. Clearly one of the issues around demand is how much latent demand exists or does not exist for any particular program. While we are doing some of that work, a lot of that work obviously will feed into any government policy consideration process, so we would not really be in a position to talk about it.

Senator SIEWERT—In terms of rolling out income management in the NT, has there been an increased demand, or what has been the uptake of services in the roll out of income management?

Mr Riley—I can give you some data on that. For 2009-10, almost 14,000 people in the Northern Territory and Western Australia—that is individual clients, and I know we have had that issue in previous hearings— sought service through either a money management service or from a financial counselling service. I have some client data here for you. That was 8,241 people in the Northern Territory and 5,500 in Western Australia.

Senator SIEWERT—That is for 2009-10. The new income management has obviously been rolled out since then. Are you able to give some comparisons in terms of the uptake since the new version has been rolled out?

Mr Riley—The figures on this are not due to be provided by the service providers until the end of the financial year. I can in part answer your question, but not in terms of client numbers. With the funding that was allocated to ensure a greater coverage of locations and communities in the Northern Territory, we now cover 180 communities. Given the election was last year, many of those funding agreements were only executed towards the end of the calendar year. Given the scale of the commitment, it was not a matter that I could enter into in a caretaker period. Those services are all, or almost all, up and running either with a presence in the community or through an outreach. We have now covered those 180 communities.

Dr Harmer—Many of the additional 100 or so communities that are now on line have only been operating for a few months, so we will not be able to get very good data until probably mid-year.

Mr Riley—That is right.

Senator SIEWERT—Are people making use of the services as they are being rolled on to income management?

Ms Hefren-Webb—People do not necessarily disclose to the money management service their status as an income managed or non-income managed customer. That is just one thing to be aware of. They are under no obligation to disclose that.

Senator SIEWERT—I appreciate that. We should get a bit of an indication from the numbers of people that are accessing it and looking at the time when they started accessing it. That should give us an indication.

Dr Harmer—We are quite likely to see that.

Senator SIEWERT—As we know from the WA evaluation, people were not accessing financial services. One of the ideas of income management is to improve your financial management, yet in WA that was not happening. I want to know, therefore, whether that is happening. I think we started talking about this last time, but is there now an increased effort to get the people that are on income management and are not accessing financial services to be accessing financial services?

Ms Hefren-Webb—Centrelink’s practice is to refer every income managed client to money management services and also to re-refer them at each contact point with them. We have put additional strategies in place for precisely the reason you outlined.

Dr Harmer—There is a strong intention that we use the money management facilities for the income managed people to improve the service.

Mr Riley—I can give you some client data that gives us a positive client pattern in that regard. In 2008-09, we had 5,277 people; in 2009-10, I would refer you to those numbers I gave a few minutes ago. So we have had a positive upward trend. In addition to the matters that Ms Hefren-Webb just mentioned, we have funded the Money-Mob Talkabout bus, which is a travelling education service that is designed to create a bit of a community event as it travels around to somewhere in the order of 70 communities in the Northern Territory, often working with the school as a way of engaging with parents in the communities and so forth. That is one innovative way in which we have tried to raise demand for the services.

Senator SIEWERT—Just so I can be clear, the funding for the financial services that are attached to income management and the initiatives you have just been talking about does not finish in June, does it?

Mr Riley—That is right. We are in the first financial year of a four-year funding allocation.

Ms Hefren-Webb—I might just clarify that. The funding for the services in the NT does not finish in June. It funds for the four years. The funding for the whole of the income management program in WA currently terminates at the end of June.

Senator SIEWERT—Because that was part of that pilot practice?

Ms Hefren-Webb—So that is subject to the budget process.

Senator SIEWERT—Thank you. That is much appreciated.

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