The First Nations Foundation says the Banking Royal Commission was a “lost opportunity” in improving the relationship between Aboriginal Australians and the finance sector.
The organisation said the Commission neglected to investigate a lack of access to resources teaching financial literacy, which they said was the fundamental cause of financial exclusion for Indigenous Australians.
Chair of First Nations Foundation Ian Hamm said the Commission should have focused on how the finance sector could support Indigenous Australians achieve economic prosperity in the long-term.
“What [the Commission] really did was look at regulating or tightening up the controls over the finance sector in its operations. The commission didn’t look at how we support individuals become better equipped to deal with the finance sector or how to deal with population groups, in this case Aboriginal Australians,” he said.
Mr Hamm said the Commission also dealt with a number of the worst cases in remote areas, but failed to address the 80 per cent of Aboriginal Australians living in regional and urban areas.
He said incidences of Aboriginal people running into payday lenders was particularly greater in urban areas.
“You can be ripped off just as much in the west of Sydney as in the west of Alice Springs.”
Mr Hamm said although Aboriginal people have increased participation in the economy, higher-level financial literacy skills were still not being taught.
“As more Aboriginal people are earning more money—there’s a rapidly-growing Aboriginal business sector—the need for a more comprehensive understanding of the complex skills of financial management is what we need in our community,” he said.
He said there were “huge” sums of money being negotiated, especially in financial settlements between native title bodies and mining companies.
“People need to be properly-equipped to manage those funds into the future and stop non-Aboriginal ‘carpetbaggers’ advising them, or people who support bad decisions and put self-interest at the heart of what they’re doing surrounding Aboriginal people,” he said.
Mr Hamm said the banking and superannuation sector needs to “step up” and further invest in Aboriginal communities.
“[The finance sector] has done work in the past, but a lot of it has been driven by customer acquisition for individual companies or it’s been a philanthropic approach, rather than making Aboriginal financial wellbeing a part of their core business,” he said.
“There should be an Aboriginal-led financial strategy developed in partnership with the financial sector,” he said.
Senator Rachel Siewert said the deliberate targeting of people in remote First Nations communities by the financial services industry was “particularly egregious”.
“During the Royal Commission we heard sickening evidence of companies targeting regional and remote areas for funeral insurance often signing people up who had little understanding of what the policies meant, language barriers and the use of Aboriginal ‘branding’ to trick people into thinking they were signing up with an Aboriginal organisation,” she said.
“The Government must act quickly to remove the exclusion of funeral expenses policies from the definition of ‘financial product’; so that they are properly regulated and put beyond doubt that the consumer protection provisions of the ASIC Act apply to funeral expenses policies, as well as banning the hawking of all insurance products.”
The Government agreed to take action on all 76 recommendations contained in the Royal Commission’s Final Report.
The Prime Minister Scott Morrison said in a statement that “the Government is confident the actions … will put in place the necessary legislative framework, providing regulators with the power and resources to hold those who abuse our trust to account.”
Christopher Pyne told ABC Insiders the government would implement the recommendations after the May federal election.
By Andrea Cantle