Students lack basic money skills: Commonwealth Bank Foundation report
22 February 2006
Commonwealth Bank CEO and Chairman of the Commonwealth Bank Foundation, Ralph Norris today released a new report indicating a nationwide lack of money management skills among Australia’s youth.
The landmark assessment of over 43,000 students in Years 9 and 10, attending Australian secondary schools in 2005, revealed a third to half of all students lacked some basic skills in understanding financial matters such as reading a bank statement and using an ATM.
The Australian Financial Literacy Assessment (AFLA) 2006 Report is a national first and was conducted by the Commonwealth Bank Foundation through Educational Assessment Australia, part of the University of New South Wales.
The report provides a comprehensive overview of the financial capabilities of Australian students in Years 9 and 10 and represents the first national standard in financial literacy against which future assessments can be measured.
AFLA Key Findings
- Males and females performed equally on AFLA
- 80% of students could understand pricing strategies
- Around 50% of all respondents could not interpret a bank statement
- Around half the students did not understand motor vehicle insurance
- 40% of year 9 and 28% of year 10 were unable to identify the relevant government department to contact about an Australian Tax File Number
- 30% of Year 9 students and 26% of Year 10 students could not calculate best value when shopping
- Between 20% and 30% of all students do not recognise indications of Internet fraud
- Some 15% to 20% of students could not calculate how to withdraw required sums of money from an ATM
- Around 15% of both years 9 and 10 could not understand the cost implications of entering an SMS competition
Speaking at the report’s launch, Ralph Norris stated, "The AFLA 2006 Report shows a high level of confidence from students in a consumer capacity but exposes large gaps in their understanding of general financial transactions."
"This combination of seasoned consumerism yet only moderate financial understanding and competence among significant numbers of our school children - who could soon be joining the workforce, starting to rent, preparing for higher education or buying their first car - needs to be addressed."
Mr Norris said competence in basic financial skills is an issue of great importance to young people’s futures and Australia’s future.
The Commonwealth Bank Foundation is a visionary leader in the area of financial literacy and is working to tackle the issues that have arisen from AFLA. It is capitalised with a $70 million contribution from the Bank. The income stream from this capital supports the Foundation's activities.
As a key part of the assessment program the Foundation has established an online resource for all schools. The Commonwealth Bank Foundation’s Financial Literacy Curriculum Resource provides teachers with the opportunity to address specific weaknesses and strengths in their students’ learning with tailored teaching tools.
This is in addition to the comprehensive education sector programs such as e-Learning Grants for primary students and Financial Literacy Grants for high school students, which the Foundation has put in place in partnership with education groups, authorities and teaching associations across Australia.
For further information about the Commonwealth Bank’s financial literacy programs and to view a copy of the AFLA 2006 Report please visit www.commbank.com.au/foundation
For further information:
The Commonwealth Bank
Ph: (02) 9378 2504
Mob: 0411 080 268
For media interview contact:
Phone: (02) 9378 2663
Mob: 0414 789 649