The stated aim of school banking programs is to teach children financial literacy, but lately they’ve been criticised as the “sophisticated marketing machines of the big banks”.
Greens MLA Johnathan Davis is pushing for the programs to be removed from all ACT public schools following an Australian Securities and Investments Commission’s (ASIC) report found that the programs did not work and that conflicts of interest are not appropriately disclosed.
“Reading the report, I was extremely disappointed to learn that many schools receive kickbacks from banks for every student they sign up to one of these programs,” Mr Davis said.
“Our schools don’t exist to create customers for big banks.”
In a motion passed by the Legislative Assembly today (10 February), Mr Davis called on the ACT Government to transition away from banking programs in schools before July this year and replace the programs with financial education resources from Money Smart.
Money Smart is run by ASIC and provides online resources and tools to teach financial literacy. It has already developed education resources in conjunction with the Australian Curriculum, Assessment and Report Authority.
The Liberals moved to extend the timing of the removal to the end of the school year to not disrupt programs that have already started and to give teachers more time to replace the programs but the amendment was voted down.
School banking programs have been run in NSW as far back as the 1880s, and the Commonwealth Bank of Australia started its banking program in schools in 1931.
Australian Education Union ACT Secretary Glenn Fowler welcomed the motion, calling the program an anachronism that was still in schools for nostalgic reasons.
“This is like a fast-food chain running a food class or the school canteen,” he said.
“It may have been a different story back in the day when CBA was the national bank … but it is inappropriate for a big commercial bank to be in schools.”
Mr Fowler said that government-run programs, such as the resources offered by ASIC, should instead be taught in schools to avoid any commercial conflicts of interest.
CBA paid thousands of schools almost $6 million over the past three years to run the programs, causing the corporate watchdog to call on the bank to be more transparent with its practices as schools were paid more depending on the number of deposit accounts opened.
CBA had over 175,000 school banking program accounts at the end of June last year,
“The banks will tell us that they provide financial literacy programs that help improve young people’s relationships with money, but they provide no evidence to prove that,” Mr Davis said.
According to research from Choice, consumers often stick with the first bank they join with almost half of Australians opening their first bank account with CBA in 2019, and more than a third still have that account.
In September 2020, ASIC wrote to each state and territory education authority outlining the review’s key findings and to understand what policies their respective jurisdictions may have for the governance and oversight of school banking programs. The ASIC report was released in December.
In late 2020, Victoria said it would ban “low-quality” school banking programs in 2021.