Consumer advocacy group CHOICE have called for all Australian schools to ban the school banking program once and for all.
CHOICE describes the program as “marketing masquerading as financial literacy”.
Victoria and ACT have already taken the lead by banning the banking programs.
The Victorian government announced it would ban “low-quality” school banking programs run by financial institutions from term 1, 2021. They will be replaced with school-run programs about financial skills.
Minister for Education James Merlino said,
“Victorian students deserve high quality financial literacy, free from commercial interests that’s why we’re banning financial institutions from delivering school banking programs.The Victorian curriculum sets our expectations for financial literacy and that must be our focus. It is time to draw a line under this issue.”
The ACT’s Legislative Assembly recently passed a motion to remove school banking programs from public schools from July 2021, after a motion was unanimously passed.
Now the Tasmania Education Union has also demanded the program be banned in Tassie schools.
The Union state manager Brian Wightman said the Tasmanian Government needed to follow this lead.
“There is obvious need for financial literacy to be a part of the school curriculum, however, our students deserve programs delivered by qualified teachers, without being exposed to one of Australia’s largest child marketing schemes,” he said.
Tasmania Government minister, Michael Ferguson, said work was underway by the Tas Education Department on the issue of banking programs in schools.
Why the Uproar?
There is very little evidence to suggest school banking programs teach students lasting habits to improve financial literacy.
Concerns have also been repeatedly raised about banks using inappropriate tactics such as luring children with prizes and incentives to develop trust and loyalty in banks at an inappropriate age.
ASIC found that banks, including the Commonwealth Bank used sophisticated marketing techniques to get school children to open an account with their bank.
There has even been some reports around the inappropriate promotion of credit cards to primary school-aged children.
In 2018, CHOICE awarded the Commonwealth Bank a Shonky Award for their Dollarmites program. CHOICE called the scheme a “relentless marketing program targeted at young minds.”
The CBA, Dollarmites program, has existed in some form since 1931.
Last year more than 175,000 primary school-aged students participating in Dollarmites opened an account with Commonwealth Bank as part of the program.
ASIC reported more than $1 million was given to schools across the country last financial year, mostly by the Commonwealth Bank, who hold a 97 per cent share of banking programs in schools.
Other ways to encourage kids to save money
- Why not start a money jar or piggy bank so they can see the money building up.
- Set a weekly allowance and encourage them to save an agreed amount each week.
- Chore chart – set a payment amount for each chore completed.
- Match your child’s savings – Consider matching your child’s contributions dollar for dollar to encourage saving.
- Encourage them to save for that new toy or game they have been begging for. Layby is always great as they know it is sitting there waiting for them to collect once they have paid it off.
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If you’re wondering where to start looking for the top kids savings accounts around, try checking out the winners of the Mozo Experts Choice Awards.
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