The Conflict Between Financial Decision Making and Indigenous Australian Culture

To provide some insight into how the Indigenous population fit within Australian society, the following discussion highlights some of the issues of remoteness, unemployment and health issues that impact on the Australian Indigenous population.

In the 2011 Census, 548,400 people identified and were counted as being of Aboriginal and Torres Strait Islander origin, representing 2.5% of the Census count.

New South Wales had the highest count of Aboriginal and Torres Strait Islander people (172,600 or 32% of the national total), followed by Queensland (155,800 or 28%) and Western Australia (69,700 or 13%). Combined, these three states made up almost three-quarters (73%) of people who identified as being of Aboriginal and Torres Strait Islander origin. In contrast, the Northern Territory had the highest proportion of the population counted as being of Aboriginal and Torres Strait Islander origin (27%), while Victoria had the lowest proportion at less than 1% of the state total (Australian Bureau of Statistics 2011)

Aboriginal and Torres Strait Islander people, some 32 percent, live in the major cities and in urban settings (Australian Bureau of Statistics 2008). Interestingly the majority of Indigenous population are under 15 years of age, with only 3 percent 65 years and over. In comparison, the median age for non-Australians is 37 years and 19 percent are 15 years and under (Australian Human Rights Commission 2008).

Unfortunately, the statistics suggest many Aboriginal people are disadvantaged across most aspects of life. The Australian Bureau of Statistics (ABS) indicate the unemployment rate for Indigenous Australians is around 17 percent (2008), three times higher than the rate for non-Indigenous Australians at 5 percent (2008). Such high rates of unemployment are understandable in the context of low levels of education, with a modest 22 percent of Indigenous people completing Year 12. Furthermore, some 31 percent of Indigenous people aged 15 years and over reported high to very high levels of psychological distress, while 50 percent of Indigenous people aged 15 years and over have a disability or long-term health condition and some 69 percent were living in rented accommodation (Australian Bureau of Statistics 2010).

The most recent report, Overcoming Indigenous Disadvantage (OID) by the Productivity Commission, released in 2014, identifies mixed results for Australia’s Indigenous people. Although there are some positive aspects such as life expectancy and child mortality rates which have improved, the rates of disability and chronic disease remain high. The OID report further indicates that economic outcomes have improved. Although progress has been slow, the research indicates Indigenous Australians have increased incomes, home ownership, and higher rates of full-time and professional employment. Consequently, there is lower reliance on income support. Although there have been greater post-secondary education outcomes, literacy and numeracy results, particularly in remote areas have changed little. Unfortunately, there was modest to no change in reading, writing and numeracy from 2008 until 2013 (Productivity Commission 2012).

Up until colonisation the Aboriginal population had no need for money. When colonised, the Indigenous inhabitants were thought to be few in numbers and uncivilised ‘terra nullius’. As a consequence, since settlement, Indigenous Australians have been marginalised, disposed and displaced from their lands; many were forced into missions run by church organisations (Demosthenous, 2006) and devoid of any monetary responsibilities.

In the late nineteenth and early twentieth century, Indigenous labour, both men and women was relied upon by farmers and pastoral stations as their major workforce. Many of the jobs for women were cooking, cleaning and minding the children whereas Indigenous men helped with the jobs around the stations including mustering. Some Indigenous workers were paid in alcohol, clothing, and food rations. For those who did get paid in the form of money, most often, this was withheld by the government. Recently, the Queensland government has offered Indigenous people settlement in lieu of monies earned and withheld (Demosthenous, 2006) to correct previous injustices.

The definition for financial literacy is clearly stated by Schagen and Lines (1996) as

“the ability to make informed judgments and to take effective decisions regarding the use and management of money” (Schagen & Lines 1996, p. 91).

The definition proposed by Schagen et al. (1996) has been adopted by the Australian Securities and Investment Commission (ASIC) who further elaborate by detailing the following skills and knowledge as constituting financial literacy:

mathematical literacy and standard literacy (the ability to read for knowledge and write coherently and think critically about the written word)

There is general acceptance that improving financial literacy is critical for all Australians to reach their potential in managing money and future retirement (Bin-Sallik et al. 2004). Unfortunately, research indicates that the majority of the Australian population have insufficient knowledge and or expertise to make beneficial financial decisions, particularly about their superannuation (Beal and Delpachitra 2004; Moldofsky 2006; Worthington 2008). This is particularly true for those with low levels of education (Lusardi 2008). The Indigenous population of Australia is no different; a lack of financial skills and education inhibit and restricts their ability to manage their finances. These difficulties are further magnified by the remoteness and the low socio-economic status of the Indigenous population in Australia (Altman 2000; ANZ 2011).

Other research suggest the very basic concepts of money and mathematical literacy would need to be addressed as a first measure (Urbis Keys Young 2006; Huston 2010) before more complex financial knowledge and skills were introduced. Similarly, Bin-Sallik et al. (2004) suggest any educational programs designed to improve financial literacy and ultimately better living standards of Indigenous Australian’s, needs to consider broad based financial learning. This idea is supported by the First Nation Foundation who has encouraged the development of programs aimed at providing a sound financial foundation upon which Aboriginal and Torres Strait Islander communities can ideally function.

For outback Indigenous Australians, remoteness if a major barrier to new technologies, for example, the internet banking, ATM’s and online application for credit within the finance sector can be advantageous for many customers in the cities. However, the sheer remoteness, of the majority of the Indigenous population who reside outside the major cities have limited access to credit, loans, internet access and financial services which must inhibit their financial ability (McDonnell and Westbury 2002; McDonnell 2003). Adding to these limitations or a consequence of, Indigenous Australians are amongst those in the lowest socio economic households in Australia (Godinho and Russell 2013). Hence this group may face financial exclusion from mainstream advice and programs generally available to most Australians.

In response, the Department of Families, Housing, Community Services and Indigenous Affairs, (FaCSIA), in 2004, provided support to Reconciliation Australia to develop the National Indigenous Money Management Agenda (NIMMA) the objective being to deliver better financial services and education to Aboriginal and Torres Strait Islander communities. This initiative continues to be the catalyst for ongoing dialogue, better awareness, greater resources and increases in consumer support and training for Australia’s Indigenous population (Reconciliation Australia 2007). A number of educational programs have followed from this dialogue, for example the creation of the Outreach Team from (ASIC) previously mentioned, who have been working with Indigenous Australians about money matters and have designed a range of programs using online delivery systems which can be easily run in schools. Other existing programs include the Manage Your Income targeted specifically for Indigenous communities and run by Centacare.

For those residing in the Cape York Peninsula, there is the Cape York Partnership (CYP) who have initiated the MPower coaching and consulting (Aurukun) project, this provides the opportunity for a unique cultural experience with a well-established not-for-profit organisation to ensure individuals, in that area, receive face to face support to assist in managing their money. More recently, a new program the MoneyMob Talkabout program funded by FaHCSIA, has being developed to provide additional access to financial literacy education through the means of storytelling and using outdoor cinema, creating hands on games and other suitable activities (Financial Literacy Australia Ltd 2013).

An understanding of the remoteness and low social economic background faced by Australia’s Indigenous population appears to be reflected in current educational programs. However, it appears Indigenous culture fails to be considered in most of the educational programs. Considering Indigenous culture, when it comes to money is in direct contrast to how Western society values money, it seems implausible that culture is not a priority.

When it comes to the use of money, Indigenous culture, challenges main stream Australian societal norms. It is therefore important to understand how Indigenous communities view money and wealth creation generally.

The complexities of Indigenous culture and its impact may well be best summarised by Patrick Dodson who stated:

It is very difficult for an Aboriginal to have total propriety right over anything. You are always obliged to share with your brothers in law, your fathers in law, family, to give things away but you would give it away without worrying about whether you would get a return for it. Because you know in the society there will be return sometime when someone is in a position to do so …. (The Age, 1989, p. 52)

Indigenous culture has a history going back many thousands of years. Although many Indigenous people live and participate in 21st century Australia, their culture and value system contradicts the western way of life, particularly in relation to financial matters. According to Indigenous beliefs

[T]the physical environment of each local area was created and shaped by the actions of spiritual ancestors who travelled across the landscape. Living and non-living things existed as a consequence of the actions of the dreaming ancestors (Purdie et al. 2010 p. 26).

The connection to land is fundamental to Indigenous people, the concept of Indigenous land ownership was at the point of colonisation, and even today are at odds with western values in relation to property ownership and resulting legal systems. The dreaming stories created boundaries or territories and each individual belonged to certain territories within the family group. Consequently, the land was not owned but one belonged to the land (Purdie et al. 2010 p. 26).

Purdie states that these complexities continue as a result of the kinship system, which placed each person in relationship to every other person in the group and determined the behaviour of an individual to each person. The kinship system also took into account people external to the group (Purdie et al. 2010 p. 26). This relationship of sharing is a key part of the Australian Indigenous culture and reflected in attitudes to work and living and financial needs (Peterson and Taylor 2003). Resources including money are to be shared; individual needs cannot be prioritised ahead of the family, extended family or the community (Martin 1995; McDonnell 2003). This is part of the Indigenous culture, of kinship, exchange and sharing (Peterson 2005). For example, an Indigenous person, with surplus income is subject to demands by family and community for money (Godinho 2014). Such actions are in complete contrast to the financial decisions and norms practised by the majority of Australians (Harris 1990). This cultural difference, when it comes to the use of money, acts as huge inhibitor when trying to encourage Indigenous Australians to take charge of their individual financial decisions and accept the need to manage their money and their future wellbeing, as their primary responsibility and put any consideration for the community as a secondary consideration.

Even with some limited understanding of Indigenous culture, it is difficult to understand how the Western use of finance can be compatible. First, let us describe the traditionally or generally accepted term ‘financial literacy’. As mentioned previously, in Australia, ASIC, the Financial Literacy Foundation and the Australian and New Zealand (ANZ) Bank have utilised a definition by Schagen and Lines (1996) as highlighted earlier.

the ability to make informed judgments and to take effective decisions regarding the use and management of money (Schagen and Lines 1996)

This definition incorporates the understanding of money, savings and investment to make effective, understanding of financial terms and concepts, as well as the ability to use technology to make beneficial personal financial decisions (Reid, 2003). Such definitions and concepts appear to be in conflict with Indigenous culture and kinship. For example, ‘Kin do have the right to make demands on each other for hospitality, food, financial help and other services’ p. 15 (Keen 1994). Individual saving is seen as selfish and stingy (Senior, Perkins, & Bern, 2002).

There is evidence that some Indigenous Australians do resist the culture of sharing, using various strategies such as, earmarking money for different purposes or spending the money quickly on things, to keep money within the immediate family (Senior et al. 2002). However, this cultural resistance appears to be in the minority, generally saving money and keeping money within the immediate family is contradictory to Indigenous culture and their traditional way of life.

This raises the question, is it possible for financial education programs as traditionally perceived by most Australians a viable option to educate the majority if Indigenous Australians? Our study suggests that the impact Indigenous cultural needs to be better understood before financial literacy education programs can be designed. Additionally, for the many Indigenous Australians, who consider their traditional culture overrides western values the acknowledgment of the importance of “culture” is imperative if successful outcomes are to be achieved.

Lahn (2008) suggests that our educational framework does not suit all Australians. This may be particularly relevant to Indigenous Australians whose culture challenges accepted norms of non-Indigenous Australians.

Although there is limited research when it comes the success or failure of financial education programs for Indigenous Australians, a small experimental learning approach running at six Indigenous communities in South East Queensland appears to have some success. The program incorporated a range of activates including exercise, games and homework tasks applied to the groups personal experience when it comes to money. Although, the sample size was small and participants self-reported they indicted an increase in self-confidence when it comes to money (Brimble and Blue 2013).

A review of current educational programs available specifically for Indigenous Australians finds little emphasis has been put on culture. Of the seventeen programs reviewed only two programs appear to consider culture as an essential consideration in the design of the programs.

The first of these is a program developed by First Nations Foundation (FNF) in 2011 called My Moola. FNF is a not-for-profit public company limited by guarantee. FNF aims:

to ensure that Indigenous Australians have the skills to be in a position to protect the things that they value and to sustain culture and a sense of identity, they need to build the capacity to be equal players in the mainstream economy. ‘Closing the gap’ in critical areas of financial and economic participation is also a key to improved health, employment and education outcomes, enabling First Australians to live full and productive lives – living, learning and earning (FNF Website)

My Moola was established with the support and assistance of Credit Union Australia, Arnold Bloch Leibler and the ANZ Bank.

FNF have identified that financial literacy is one of the major causes of social exclusion for Indigenous Australians. FNF state that in a report by the Centre for Social Impact in 2012, that 43.1% of Indigenous Australians surveyed were either severely or fully socially excluded compared with the national average of 17.2 %.

My Moola is designed to opening financial pathways and is specifically designed as an adult financial literacy program for members of Indigenous communities. The workshops are fun, interactive and delivered in a culturally safe environment. The My Moola program additionally, incorporates personal development and goal setting with financial literacy.

My Moola is an 8 module program over two days and has a holistic view to financial empowerment. This program considers the following perspectives:

Explores Indigenous history and culture relating to money

On 10 December 2014 First Nations Foundation (FNF) in collaboration with the Brotherhood of Saint Lawrence announced the 2014 My Moola program Evaluation Report. The report states:

“financial literacy is still the major challenge and ongoing preventative work in dealing with the core issues….. which have intergenerational flow on effects.”

Additionally, Dr Nikki Moodie, a key contributor to the report states:

“The response we received from participants was over whelming and the results indicate that the program has made significant changes to the lives and financial competency of the participants

…….My Moola has the capacity to provide unique and culturally appropriate support for Indigenous staff in all sectors”

The conceptual framework of My Moola is best illustrated in First Nations Foundation: Enhancing Indigenous Financial Capability Programs (2011) document. Diagram 1 below focuses on the interconnectedness that must be acknowledged in designing successful education programs for Indigenous Australians. The diagram describes the barriers that impinge on the successful financial capability strategies designed to increase levels of financial literacy in this group. It should be noted that the report highlights that there are several influencing factors. One of these factors “culture” must be addressed in designing and developing appropriate services to achieve successful outcomes.

Diagram 1:

The second program identifying culture as pivotal inclusion for financial literacy programs is one developed by the Cape York Partnerships. This program called MPower is strongly focused on coaching and education, for the needs and aspirations of Aboriginal and Torres Strait Islander clients.

This program concentrates on the 4Cs are:

Class: teaches mainstream curriculum in English literacy and numeracy using Direct Instruction (DI) methods

Club: provides artistic, musical and sport programs

Culture: provides comprehensive Indigenous culture and language programs delivered by teachers and local cultural tutors, it also involves on country camps and activities

Community: provides case management of each student’s attendance, school readiness, health, nutrition, well-being and parent engagement, working closely with the Family Responsibilities Commission

The designers of this program consider it is individuals and families, not communities, who are the key agents of change in the move from passive welfare to self-reliance and economic freedom. The Cape York initiative fundamentally considers that communities are uplifted only when widespread individual and family change occurs.

“‘Push’ and ‘pull’ factors are needed to get individuals and families to change from passivity, dependence and dysfunction, to responsibility, self-reliance and functioning. Push factors might include increasing the conditionality of welfare payments; pull factors must include providing opportunities and investment in capability-building.”

Furthermore on their website, the Cape York Partnership Agenda is “……unashamedly child-centred – improving the future for children is a clear moral priority. We are forging a new path that puts children, families and homes very much at the centre”.

The Cape York Welfare Reform package seeks to:

Improve the abilities of individuals and households to manage income and household budgets

Under the Cape York Welfare Reform trial, the development of an Opportunity Hub (O-Hub) focuses on the empowerment of individuals and families, so they can change their own and their children’s lives. Through O-Hubs, people can access opportunity products such as MPower for financial literacy; Student Education Trust (SET) to assist parents to plan and save to support children’s education; and parenting support services. O-Hub might offer that first step to taking control of their money through use of the MPower program.

The O-Hub provides an environment for building self-reliance and responsibility. Its focus is to bring welfare dependent individuals and families up to a level of basic functionality with the support of opportunity products and programs this includes income management and budgeting. MPower supports individuals and families to manage money for basic material needs; builds capabilities through financial literacy and behaviour change; and builds assets through saving and disciplined money management.

MPower objectives are clearly stated on their website include:

To assist families to manage money so that basic material needs (food, clothing, shelter etc.) can be sustained

In respect of child’s education the Direct Instruction (DI) method has three essential components:

“class”, the core DI program, which delivers 20 hours of literacy and numeracy teaching every week;

The Cape York programs delivered to children embed into the curriculum an our cultural program which represents the cultures of different communities groups across Cape York Peninsula and the Torres Strait Islands. In designing these programs family and community members are invited to engage in teaching traditional cultural dances, singing, language and arts. These education programs previously mentioned including financial literacy emphasis that culture is an important component of an Indigenous school, which moulds education and culture into a holistic approach to each child’s growth.

Whilst our research has been limited to considering only one barrier that is “culture’, further research needs to be conducted in relation the remaining identified barriers. Another avenue of future research could focus on testing participants of a sample number of programs. This would occur before and after completion of the chosen education program in order to measure any demonstrable outcomes.