Financial Exclusion Remains ‘Stubborn’

Between 2006 and 2013, almost one in six people in Australia were severely or fully financially excluded meaning that they still had no access to at least two basic financial products, a new report reveals.

The Eight Years on the Fringe report by the Centre for Social Impact and NAB highlights that financial exclusion is a “stubborn” problem and that people who are severely or fully financially excluded are at higher risk of poor economic, social and health outcomes.

The report shows that:

• Australia has not shifted the problem of financial exclusion between 2006 and 2013. Approximately one in every six Australian were severely or fully financially excluded throughout 2006 – 2013.

• Aboriginal and Torres Strait Islander Australians and people born in non-English speaking countries were over-represented in the severely or fully financially excluded group.

• Financially excluded people were more likely to have higher unemployment levels and lower educational attainment.

• Severely or fully financially excluded people were more likely to be young, rather than older, adults

The research was led by Associate Professor Kristy Muir, Research Director (Social Outcomes) at the Centre for Social Impact.

“While the Global Financial Crisis (GFC) had a clear impact on various economic domains in 2008-2009, recovery was nonetheless fairly quick in many indicators across the country,” Muir said.

“However, the story is a different one for those on a low income, those at risk of economic instability, and the severely or fully financially excluded.”

According to the report, the picture of financial exclusion in Australia had “hardly changed between 2006 and 2013”.

“Over that period, severely or fully financially excluded individuals were more likely to be women than men; younger adults aged between 18 and 34 years; and living in capital cities.

“Further research is required to understand why financial exclusion has not shifted in Australia and how to get the needle moving.”