The Australian curriculum: global perspectives on consumer and financial literacy

1. The Australian curriculum: global perspectives on consumer and financial literacy Liz Criddle Business Educators Australasia Biennial Conference 2012

2. Overview A. Current global research • Background • International financial literacy guidelines • Developed and developing countries • Gaps in knowledge and skills, consumer decisions, enabling the marginalised • What are global programmes trying to achieve? B. The Australian context • PISA • National Consumer and Financial Literacy Framework • Economics and business in the Australian Curriculum • What works – marginalised groups, behavioural economics, teacher resources • Understand your context, your students, and how you frame your pedagogy.

3. Premier’s First State Super Financial Literacy Scholarship Sponsor – First State Super

4. Current global research • South Africa, 15 % cannot divide 1000 RAND between 5 people; • United States, 27% know what inflation is • UK, 52% are in debt by the age of 17 • Denmark, 73% have no or little knowledge of interest rates Background: OECD and International Network on Financial Education (INFE) concerns

5. International financial literacy guidelines • Coordinated national strategy • Learning framework • Sustainably resourced • Core part of the school curriculum • Ongoing support and training • Student progress

6. Developed and developing countries “For each of us, financial literacy is key to living our daily lives with dignity. It is also a ‘gift’ that each of us has to give to him or herself, in order to be a dignified citizen of the world” (A. Fullani, Bank of Albania) Emerging markets GFC Sceptical consumers

7. Gaps in student and adult knowledge and skills CASE STUDY – INDIA • Too many savers, complex financial landscape, requires outreach programmes and multiple languages – many target groups not just schools • Dedicated investor website: http://investor.sebi.gov.in/ • “Pocket Money” programme

8. Consumer decisions CASE STUDY – USA • More sophisticated products, huge variety in market, regulators rely on investors. • The role of the consumer is to uncover financial frauds. CASE STUDY – MALAYSIA • Expectations that investors have vs need for own vigilance, regulators protect investors. • Consumers must use own due diligence.

9. Enabling the marginalised CASE STUDY – TURKEY • Real estate and gold, very small markets, women are marginalised. • Dedicated education website: http://www.yatirimyapiyorum.gov.tr/

10. Discussion questions • What are global consumer and financial literacy programmes trying to achieve? • Who is the curriculum being written for?

11. The Australian context (sort of) OECD definition of financial literacy: “Knowledge and understanding of financial concepts, and the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts, to improve the financial well-being of individuals and society, and to enable participation in economic life.” PISA - The results of the 2010/2011 pilot study on financial knowledge and attitudes found: “The results highlight a lack of financial knowledge amongst a sizable proportion of the population in each of the countries surveyed… There is considerable room for improvement in terms of financial behaviour” http://www.oecd.org/finance/financialeducation/measuringfinancialliteracy.htm

12. National Consumer and Financial Literacy Framework Definition of consumer and financial literacy “Individuals who are consumer and financially literate have the ability to apply knowledge, understanding, skills and values in consumer and financial contexts to make informed and effective decisions that have a positive impact on themselves, their families, the broader community and the environment.”

13. Economics and business in the Australian curriculum “The Australian Curriculum: Economics and Business comprises Economics, which is seen as the underpinning discipline, and Business, where the economic concepts apply across a range of business contexts” (Page 3)

14. Definition of business “The study of Business, in tandem, broadly encompasses all activity by the producers and suppliers of goods and services; the enterprising endeavours that our society undertakes to meet our needs and wants. Business activity affects the daily lives of all Australians as they participate in all aspects of society from a simple purchase in a convenience store to developing advanced technology or digital media.” (Page 3)

15. Key ideas • Resource allocation and making choices • Consumer and financial literacy • Enterprising behaviours and capabilities • Work and business environments

16. Knowledge and understandings a) The nature of resource allocation, the role of opportunity cost and incentives in economic and business decision-making; the trade-offs involved when making decisions and the immediate and future consequences of these decisions. b) The role of production, distribution and exchange along with trade and globalisation in influencing Australia’s living standards. c) Key elements of how economies and businesses operate, the role of consumers, producers and governments in decision-making, the interdependence of, and interactions between, the various sectors of the economy. d) The effect of key economic and business decisions related to sustainable development, social justice and equity in local, national, regional and global contexts. e) Consumer and financial literacy strategies and the importance of making effective, informed consumer and financial decisions. f) The importance and role of enterprising behaviours, along with dynamic entrepreneurship and innovation, in the development and prosperity of an economy. g) Aspects of business management and decision-making, such as business planning, marketing, operations and finance. h) How the changing nature of work affects the interests of employers, employees, unions and work-related groups; the role of government in affecting the world of work; and employment opportunities. i) The way in which technology has transformed the business environment and the different skill sets and capabilities, including teamwork and collaborative effort, required to meet the needs of dynamic work environments in a local, national, regional and global environment.

17. Discussion questions • To what extent is the definition of consumer and financial literacy developed in the curriculum? • Is there an underpinning discipline – (economics or business)? • Is the definition of “business” extensive and/or precise enough? • What world view is contained in the key ideas? • How will you frame the knowledge and understandings – from whose perspective will they be taught?

18. What works?Marginalised groups “Money is becoming more and more invisible, while financial products are becoming more complex, and responsibility is being shifted to the individual.” Olaf Simonse

19. What works? Behavioural economics • “Irrational” • Different behaviours Financial market factors Low financial literacy

20. What works?Teacher resources: • https://www.moneysmart.gov.au/ • https://www.sorted.org.nz/ • http://startsmart.com.au/home/startsmart-programs/ • www.asx.com.au • www.taxsuperandyou.gov.au

21. Finally… “Curriculum is inescapably about ideas and values… it is tied up with visions of the purposes of schools, hopes for the young people who go there, beliefs about what foundations matter and about how learning and development… might be nurtured – these… are subject to change and are not uniform throughout Australia” (Yates, Collins and O’Connor, 2011).