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Comm
Australian Financ
ia
l Literacy
Assessment
“
I don’t budget my money yet but I do watch what
I spend. I think the assessment has encouraged this even more.”
Jonathan Guy, AFLA 2006 Medal Winner, Circular Head Christian School, Smithton, TAS
“It was really good to be tested on our financial literacy because
this is a topic that we encounter everyday
in real life. It’s good to know where we might have problems.”
Melinda Norquay, AFLA 2006 Medal Winner, Caringbah High School, Caringbah, NSW
“
I manage my money so that I can do things I want
to do when I’m older, like travelling for example. I will put my
financial literacy to use when I head overseas in a few years time.”
Francis Chan, AFLA 2006 Medal Winner, Scotch College, Hawthorn, VIC
commonwealth bank foundation
overview
The Commonwealth Bank has been involved in and supportive
of education for over 70 years. In 2003, the Commonwealth
Bank Foundation was established to encourage developments
in education, in particular the financial literacy skills of young
Australians. The Foundation is guided by the goal of creating
awareness, skill and understanding of a more financially
literate community.
The Commonwealth Bank Foundation’s programs are
designed to promote the benefits of money management
skills amongst those considered least financially literate.
Our research has shown that improved financial literacy
can reduce poverty, increase economic opportunities and
boost national savings*.
Many of our programs are aimed at providing young people
with the financial skills they will need to take them through life.
We believe that financial literacy education at the grassroots
level is one of the most effective ways of ensuring a financially
literate population.
“Students my age may not have a lot of money but
if they don’t learn how to manage it now, and if they
don’t learn why it is important to manage money
now, they could have financial problems when
they’re older.”
The grants seek to help schools implement an education
program that will help develop or improve student financial
literacy awareness, understanding and skill.
Grant applications are available from May and close in August.
DollarsandSense.com.au
The Dollars and Sense website is available to teachers and
students as part of the Financial Literacy Curriculum Resource.
It provides interactive teaching resources for teachers as well
as relevant and engaging money management information
for young people aged 14 to 18.
StartSmart Financial Literacy Forums
The Commonwealth Bank Foundation also offers a wide
range of workshop options for 16 to 24 year olds, including
StartSmart workshops in regional Australia, and the StartSmart
Youth Financial Literacy Conferences in all capital cities.
The StartSmart Financial Literacy Forums for teachers are
designed to develop the confidence and skills of teachers
who teach financial literacy, and will be offered in each capital
city in 2007.
The StartSmart Schools Program is offered in secondary
schools and features interactive lessons delivered by trained
Commonwealth Bank staff. Schools can choose from four
modules – Earning an Income, Bank Accounts, Managing
your Money and Investing.
John Buin, AFLA 2006 Medal Winner,
Youth Advisory Council
Scotch College, Melbourne, VIC.
The Commonwealth Bank Foundation has formed a Youth
Advisory Council, which is made up of representatives
aged 16 to 24 years from each Australian state and territory.
The Youth Advisory Council members will provide the
Commonwealth Bank Foundation with advice and insight
into the needs of youth and the financial issues faced by
young people today.
Formal research and consultation has revealed that parents
and teachers are key influencers on young people, therefore
developing their skills and understanding will also have
a positive flow effect. Many of our programs are designed
to help address the gaps in financial literacy of teachers
and parents.
“My parents discuss their finances at home:
I often pick up knowledge about finances this way.
Commerce class is also very helpful.”
This important input will guide the Commonwealth Bank
Foundation in its goal to make a significant difference to the
skill development of young Australians by producing financial
literacy programs that are relevant and engaging.
Jacob Cao, AFLA 2006 Medal Winner,
Other Financial Literacy Programs
Sydney Boys High School, NSW.
We will also continue to improve financial literacy awareness
and skills with Indigenous people in partnership with
organisations such as Caritas and the Indigenous Consumer
Assistance Network (ICAN), and with disadvantaged young
people with organisations such as Midnight Basketball.
An Overview of Commonwealth Bank
Foundation Programs
Financial Literacy Grants
The Commonwealth Bank Foundation Financial Literacy
Grants program offers all secondary schools across Australia
the chance to receive a $3,500 grant. There are a total of 100
grants available nationally per annum.
* Research conducted by the Commonwealth Bank of Australia,
in conjunction with the University of Monash during 2005 revealed that if
efforts are focused on improving the financial literacy of the 10% of the
population with the lowest understanding in this area, Australia’s economy
could be boosted by $6billion per year with the creation of 16,000 new jobs.
AFLA
overview
”Participating in AFLA 2005 and 2006 was a good
way to get students practised and motivated
about money and finance. We have found that
our students enjoyed taking part in this assessment
as the content was applicable to them and
included key skills for life.”
2005 and 2006
In 2005, the Commonwealth Bank Foundation commissioned
the University of NSW’s Educational Assessment Australia
(EAA) to conduct the inaugural Australian Financial Literacy
Assessment (AFLA), representing the first nationwide research
undertaken to determine the level of financial literacy of
Australian Year 9 and 10 students.
In 2006, AFLA was repeated with 50,000 Year 9 and Year
10 students participating from over 500 schools, across
the Catholic, Government and Independent sectors from
all states and territories. This represents an increase of 15%
in the number of participants and 20% in the number of
schools participating, compared to the 2005 assessment.
The results from the assessment’s large sample base, almost
20% of Australian secondary schools, give an important
indication of the level of financial understanding and
competency of young people who already use mobile phones
and will soon have the opportunity to own credit cards and
cars, and enter into full time employment.
Almost half of
the purp
Year 9 studen
ts
ose of a
deposit
ent
‘debit’ on a bank statem
could not und
o r u nd e
Mervat Rafla, Maths and Commerce teacher
at St Mina’s and St Mary’s Coptic Orthodox College, NSW.
How does AFLA work?
AFLA assesses a wide range of skills, knowledge and
competence in financial literacy by asking a broad range
of questions related to everyday financial situations. In total,
48 multiple choice questions were asked, with questions
distributed across six categories:
■
Managing Income and Finances
■
Consumer Decisions
■
Personal Finances
■
Consumer Rights
■
Business and Technology
■
erstand
r sta nd t
he term
and Investment
The assessment categories were designed to sit alongside
curriculum subject areas in each state and territory and
are also directly related to the Financial Literacy Curriculum
Resource. The Curriculum Resource was developed by
the Commonwealth Bank Foundation in association with the
NSW Department of education and Training and a steering
committee made up of state and territory government
representatives, which included each education sector
and peak teaching association.
88%
of students
WHAt dOeS AFLA ACHIeVe?
could iden
tify
when a refund should be provided
The assessment evaluates young peoples’ knowledge,
understanding and skills in money management.
AFLA provides schools, education systems, educational
curriculum and assessment authorities, as well as the
general public, with a clear indication of the level of financial
literacy of 14 to 16 year olds.
HOW AFLA CAN Be uSed IN SCHOOLS
AFLA is not designed as a pass/fail assessment as it assesses
students in different states/territories and education systems.
Therefore it is important to note that all results and statistics
expressed in this report as percentages relate to relative
levels of achievement. In other words, 50% in this context
is not a standard for passing or failing Financial Literacy.
Through eAA, the Commonwealth Bank Foundation has
provided individual reports to participating schools and has
established an online resource to link results from individual
schools to the Commonwealth Bank Foundation’s Financial
Literacy Curriculum Resource. The reports and resources give
teachers the opportunity to address strengths and weaknesses
in their students’ learning with tailored teaching tools.
“The fact that AFLA is a practical and relevant
assessment for students means they actually
enjoy it. It relates to current affairs and is
extremely useful.
“AFLA is a fantastic mechanism for feedback,
allowing teachers to identify strengths and
target problem areas.”
Leslie tilbrook, Head of Business and teacher
in economics, Accounting and Legal Studies
at St. Phillips College, Alice Springs, Nt.
Fady Salib, a year 0 student from St Mina’s and St Mary’s
Coptic Orthodox College, NSW, sat AFLA in 006 and 00.
He said: “I
found AFLA easier this year and did better
in it because I had more knowledge. This is because
I’ve been doing Commerce this year and also have
a part-time job. When you’re earning your own
money, it’s up to you. It makes you more responsible.
AFLA gives you an idea of what life’s like outside
school: saving money and working.”
StudeNt PArtICIPAtION
Number of students
who participated
AFLA 00 ANd 006:
PerFOrMANCe ANd PArtICIPAtION
Year
School Year
Of the schools that participated in 2005, 62% participated
again in 2006.
2006
Year 9
24,336
2005
Year 9
22,202
2006
Year 10
25,223
2005
Year 10
21,027
Of the students who participated as Year 9 students in
2005, 8,435 (40%) did the assessment again in 2006
as Year 10 students. 69% of these students made an
improvement on their performance in 2005, with an average
rate of 6% improvement.
3
90%
e
ntif y th
e
id
ld
c ou
c o st
running
r
of a ca
riod
and identif y the pay pe
on a payslip
key findings AFLA 2006
AFLA 2006 revealed some positive results, particularly
with regard to students’ understanding of consumer rights.
demographic is not sufficiently prepared to enter into the
“real world”.
While Australian 14 to 16 year olds are reasonably ‘savvy’
consumers, they lack the financial skills to back up this
consumer awareness.
AFLA 2006 showed that while 76% of Year 9 students could
understand the legal responsibilities set out in a mobile phone
contract, 50% couldn’t interpret a table to compare mobile
phone plans, 51% couldn’t calculate potential savings on
SMS messages and 46% couldn’t identify mobile phone
call costs using fine print.
As it stands, there are some significant gaps in the students’
financial understanding, which, if unaddressed, will put them
at considerable risk as consumers.
The results from AFLA 2005 and 2006 show that this
young demographic are already active consumers, but lack
fundamental numeracy skills and basic financial knowledge.
For instance, many students show difficulties interpreting
a bank statement, with only 48% of Year 9 students able to
understand the term ‘debit’ and only 25% able to understand
the term ‘credit’ on a bank statement.
This information is disconcerting given today’s youth will
require considerable financial knowledge and confidence
if they are to survive as consumers and employees in
an increasingly complex and competitive financial world.
AFLA 2006 also revealed a startling number of anomalies
which give life to the premise that this school age
4
These mobile phone statistics highlight the overall theme
of the AFLA 2006 results: that students show aptitude
for understanding their legal responsibilities and rights
as consumers of products like mobile phones, but aren’t
able to calculate the every-day running costs required of
mobile phone ownership.
It is important to address these gaps in knowledge through
education, particularly when 87% of 15 to 17 year olds
have mobile phones* and 14 to 18 year olds are the heaviest
users of SMS messaging**. While many students see their
mobile phone as a gadget or a toy, it is actually a complex
and sophisticated financial product. If children are given
such products, it is important we provide them with the
knowledge to manage their use.
“It’s important to understand finances now….
so many of my friends are racking up big
mobile phone bills, for example, and we need
to know what we’re getting ourselves into.”
Jason Wong, AFLA 2005 and 2006 Medal Winner,
Sydney Boys High School, NSW.
In addition, 91% of students could correctly identify the
pay period used on a payslip, however only 32% could
correctly work out the number of working hours required
to produce an income which meets living expenses and
savings goals.
comparison of years 9 and 10 performance
The results reveal that Year 10 students performed marginally
better (3.8%) than Year 9 students. This can be attributed
to an additional year’s experience as a consumer, with
a growing proportion holding part-time jobs and having
an increased opportunity to learn through courses in
Economics, Business Studies and IT.
“I enjoy making financial decisions. I always read
the fine print before I buy something and like
to make comparisons to find the best deal.
“In Year 10 we’re moving closer to the real world.
We haven’t been taught practical things such as
how to submit a tax return, and that is something
we’re going to need to know.”
Joshua Chakravarty, AFLA 2006 Medal Winner,
100.0%
Year 9
Year 10
90.0%
80.0%
70.0%
Somerset College, Mudgeeraba, QLD.
AFLA 2006 also showed that boys outperformed girls by a
small margin, despite girls largely outperforming boys in most
school assessments, including Maths***.
60.0%
* Nielsen eGeneration statistics, March 2006
** Mobile Youth: Market Intelligence 2002
*** National results for literacy and numeracy for Year 7 students:
50.0%
40.0%
30.0%
Girls 04
Boys 04
Girls 03
Boys 03
20.0%
10.0%
0.0%
Managing
income
& finances
Consumer
decisions
Personal
finance
Consumer Business & Economics
rights
technology & investment
Reading
93.0
89.1
91.9
87.1
Writing
95.9
91.3
95.2
89.2
Numeracy
82.3
81.9
81.6
81.0
Source: MCEETYA: Ministerial Council for Education Employment,
Training and Youth Affairs
o
w
t
s
d
r
i
h
t
consumer
decisions
The Consumer Decisions category was a high scoring
category across both year groups. Students scored well
on questions relating to car ownership, a circumstance
many would have within their grasp. After all, car ownership
is a passport to freedom and one that is well esteemed
within this age group!
■
91% could identify the running cost of a car
■
9% could recognise a potential problem
8
when buying a second-hand car
■
7% could compare petrol consumption using
8
new car advertisements
■
0% of Year 9 students could calculate best value
7
(in the context of shopping)
■
50% could interpret a table to compare mobile phone plans
■
9% were able to calculate the savings on different
4
SMS messages
could identify a security feature
for online sh
opping
“I’ll put my finances to good use one day.
I’d like to do up a car.”
Benjamin Peters, AFLA 2006 Medal Winner,
Grace Lutheran College, Clontarf, QLD.
“I’m saving for a car at the moment. According
to my budget it looks like I’ll be waiting for
a few years - until I’m 19 or 20.”
James Kozelj, AFLA 2006 Medal Winner,
St. Patricks College, Strathfield, NSW.
Although students showed a good grasp of financial
understanding in the context of car ownership, students
weren’t able to apply the same capability to a range of
questions on shopping and mobile phone usage. While 70%
of Year 9 students could calculate best value (in the context of
shopping), 57% of Year 9 and 10 students did not understand
the concept of product placement, 51% were unable to
calculate the savings on different SMS messages and 50%
could not interpret a table to compare mobile phone plans.
consumer rights
This was the highest scoring category for Year 9 students and
suggests that children as young as 14 years old are already
taking an active role as consumers. Even though the legal
age to obtain a credit card is 18 years, 97% of Years 9 and
10 students could locate the expiry date on a credit card
and 75% could identify a security feature for online shopping,
which suggests they could be taking a keen interest in
their parents’ shopping habits or are already shopping
online themselves.
Key findings
■
97% could locate the expiry date on a credit card
■
88% could identify when a refund should be given
■
75% could identify a security feature for online shopping
■
59% understood the term ‘unsolicited’ mail
■
45% understood the correct method of redress
■
16% understood the role of the ACCC
“It’s important for kids my age to know about money
and how to use it wisely. Without this knowledge
you can easily get tricked into buying things you
don’t need. Knowledge makes you less vulnerable.”
Nigel Thomas, AFLA 2006 Medal Winner,
Somerset College, Mudgeeraba, QLD.
Although students had a clear idea of their rights as
consumers, only 16% understood the role of the Australian
Competition and Consumer Commission (ACCC).
CASE STUDY
St Phillip’s College
Alice Springs, NT
After participating in AFLA in 2005 and winning a $3,500
Commonwealth Bank Foundation Financial Literacy Grant
last year, St Phillip’s College in the Northern Territory has
now dedicated entire programs to financial literacy.
It is therefore not surprising that all 240 Year 9 and 10
students at St Phillip’s College sat AFLA in 2006.
Leslie Tilbrook, Head of Business Studies and Careers
(Work Education) teacher, said:
“We’re always refining and improving our programs.
In Year 10, we have a new financial literacy program
in place and the results of AFLA help us to ensure we’re
on track and providing the best education we can.
“AFLA really is a fantastic mechanism
for feedback, allowing teachers to identify
strengths and target problem areas.
“Students need to know how to manage their
money. I see students getting into debt at an
alarming rate through expenses such as cars,
computers and mobile phones. The fact that
AFLA is a practical and relevant assessment for
students means they actually enjoy it. It relates
to current affairs and it’s extremely useful.”
SAMPLE QUESTION
St Phillip’s College offers international exchange
opportunities to students in Years 10 and beyond.
Tegan Pannell, a Year 10 student, is saving to go
to Kenya at the end of the year on an international
exchange program.
Kahil has saved for the past three years so that he
can buy a car. His father advised him to buy a new car
to avoid mechanical troubles. He searched the web
and found these cars under $15,000. The site gives
information on price, features and petrol consumption.
“I’ll soon be undertaking a service project in Africa,
building classrooms and working with local communities,
which means I’m saving my money like never before!
I’m putting my financial literacy to use and watching
what I spend.”
Briton – Helios
$12,490, Hatchback, 5-speed manual, 5.1 litres/100km
Tegan says her financial knowledge is largely the result
of a recent school day which focused on financial
literacy in action.
Bellana – Enyo
$12,990, Hatchback, 4-speed automatic, 6.0 litres/100km
McGregor – Star
$13,490, Hatchback, 5-speed manual, 5.6 litres/100km
Huston – Ceres
$13,990, Hatchback, 5-speed manual, 6.6 litres/100km
When buying a car, petrol consumption is an important
financial consideration.
Which of the following vehicles has the lowest petrol
consumption?
(A) Briton-Helios
(C) McGregor-Star
(B) Bellana-Enyo (D) Huston-Ceres
“We spent an entire day talking about earning
money, the implications of signing contracts
and how to manage our mobile phone costs.
We even had a session about buying cars
and the insurance costs involved. This is
something I had never considered before.”
As a result, Tegan set up a new savings account.
St Phillip’s College is currently looking to incorporate
financial literacy education into the Years 7 to 10
curriculum in both Mathematics and Humanities classes.
CASE STUDY
80%
liverpool boys High School
liverpool, NSW
Liverpool Boys High School saw AFLA as an opportunity
to not only complement subjects such as Commerce
and Mathematics, but to also engender a feeling
among the student body as participating in wider
community activities.
could recog
Rachel Mules, Social Science and Commerce teacher
said the assessment offered practical knowledge and
tested common sense.
the economic consequences
of CD piracy
“Financial literacy is an important skill that
will help students throughout their life,” she
said. “It really should be taught from Year 7.
“Many students from Liverpool Boys High
School have non-English speaking backgrounds
and families who aren’t financially literate.
This means it’s more important than ever
for the students at our school to understand
the implications of signing contracts and
managing mobile phone bills, because it is
often their responsibility to pass this knowledge
on to their parents.
“With so many products on the market targeting youth
these days, students need to understand finances and
financial responsibility now.”
Seventy-nine Commerce students from Years 9 and 10
sat AFLA.
Shyamal Singh, a Year 9 student at Liverpool Boys
High School, enjoys the responsibility of making
financial decisions.
“It can sometimes be tough because if you make
the wrong decision and spend money you don’t
have it can take time to build up that money up
again.” he said. “I think it’s very important for
students my age to understand finances now,
particularly as we start part time jobs.”
SAMPLE QUESTION
business &
technology
Both year groups showed sound knowledge in this category,
with Year 10 (71%) scoring higher than Year 9 (64%). This can
be attributed to Year 10 students being more likely to have
part-time employment and the option of an additional year
to participate in Commerce or Technology studies.
Key findings
■
1% could understand technical terms
9
in a business relationship
■
4% could understand the need for a
8
secure website when shopping online
■
0% could recognise the economic
8
consequences of CD piracy
■
59% could calculate net profit
■
48% could understand the purpose of a deposit
■
26% could calculate the hourly rate of pay
At first glance, the fact that only 26% could calculate the
hourly rate of pay seems concerning, however this relatively
simple concept was tested in a complex scenario.
This table shows wage payment details for some employees of a firm.
Employee
Hours worked
Hourly rate
($)
Casual loading
($ per hour)
Total
($ gross per week)
Superannuation
Lai
40
14.99
N/A
599.60
53.96
Habib
6
9.00
1.84
65.04
11.71
Megan
18
?
1.84
191.70
18.94
What is Megan’s hourly rate?
nise
(A) $8.81
(B) $10.65
(C) $18.94
(D) $23.99
three
s
r
e
t
r
a
u
q
ers
could not und
‘credit’ on a
bank statem
tand the term
ent
68%
ulate
could not calc
of working
h
ours require
to meet income
10
d
the number
managing
income & finance
With the exception of one question, students fared well
in this relatively difficult category. 90% could identify the pay
period on a payslip and 89% understood that jobs need
different qualifications, however only 32% could calculate
the number of hours required to work in order to meet income
requirements and savings goals. It is critical to address
this gap in knowledge at an early age or face the potential
consequences of spiraling debt later in life.
key FINdINgS
■
90% could identify the pay period on a payslip
■
89% understood that jobs need different qualifications
■
66% could understand the progressive rate of tax
■
65% could understand employment classifications
■
57% could calculate the net wage
■
2% could calculate the number of working hours
3
required to meet income
“I started my first part-time job in the school
holidays and was asked to complete superannuation
forms, employment details and bank account details.
I had to ask a lot of questions at the time, but
now that I’ve had that experience, my knowledge
of finance has really improved.”
Jason Wong, AFLA 00 and 006 Medal Winnner,
Sydney Boys High School, NSW.
SAMPLE QUESTION
This table shows the rates of pay
for a driver delivering pizzas.
Age
Part-Time
($ per hour)
17 years
9.50
18 years
11.08
19 years
12.66
20 years
14.24
(C) 21
Wesley College participated in AFLA for two reasons.
Firstly they recognised financial literacy is an important
skill and they wanted an indication of the level of literacy
of their Year 9 and 10 students. Secondly, Personal
Finance Management is part of the school curriculum
in Western Australia.
According to Business and Accounting teacher Kathy
Krajcar, AFLA was a natural fit.
“AFLA validated the importance of what we
already have in the school curriculum: Personal
Finance Management. We were also provided
with a detailed analysis of our school’s results
and this has helped us to identify our strengths
and weaknesses. In particular, we will now
address the issue of using mobile phones
more profitably and the implications of phone
contracts on students. This is an area our school
and other schools across the country have
identified as needing improvement.”
Twenty-five Year 9 and twenty Year 10 students at Wesley
College sat AFLA and found it was based on logic, simple
Mathematics and common sense.
“Some questions were more challenging than others,” Tim
said. “My parents own a farm and have always managed
money themselves. I’ve learnt about finances from their
experiences with new software and bank accounts.
How many hours does he need to work to do this?
(B) 20.5
WeSLey COLLege
SOutH PertH, WA
Tim Siegert, a Year 9 student, said it was the first time
he’d ever sat an assessment like AFLA.
Joe is 17 years old and works part-time as a driver.
He is able to decide his hours of work and would like
to earn $195 a week to cover his expenses and have
some left over as savings.
(A) 19
CASe STUDY
(D) 22.5
“It’s important to start learning about financial
literacy in Year 9, if not before. We’ll soon be
dealing with finances in our everyday lives,
especially when we leave school and start Uni, so
I think it’s good to have the right grounding now.”
Kathy believes financial literacy education
should be a core area of focus for high school
students. “AFLA addresses contemporary issues
such as higher youth debt and the social and
financial implications of having mobile phones,
for example. It’s a practical exam and one of
relevance to Australian students.”
CASe STUDY
SAINt IgNAtIuS’ COLLege
AtHeLStONe, SA
personal finances
While students performed well in some components
of personal finance, they also revealed some significant
gaps in knowledge.
Starting a new Commerce course in 2006, teachers at
Saint Ignatius’ College in Athelstone thought there was
no better way to identify the needs of their students and
the content for the course than by taking on AFLA.
While 78% of Year 9 students understood how an ATM
dispenses currency, only 48% of Year 9 students understood
the term ‘debit’ on a bank statement and only 25% of
Year 9 and 10 students understood the term ‘credit’ on
a bank statement.
Seventy-six Commerce students from Year 10
participated in the assessment and found it relevant and
interesting. A number of students told Shane O’Brien,
Commerce, Business and Legal Studies teacher, that
AFLA raised several points they had never previously
considered, such as managing mobile phone costs.
It is important to address these knowledge gaps as students
must get into the habit of diligently checking their bank and
credit card account details for anomalies. They also need
to ensure they are managing their income and outgoings
appropriately, either online or by traditional methods.
“Financial literacy is crucial to a student’s
learning,” said Shane. “AFLA provided the
perfect platform to identify students’ strengths
and weaknesses. It was practical in nature and
questions related to how students use their
money in everyday life. AFLA will certainly have
an effect on our curriculum moving forwards.”
elisa De Angelis, a Year 10 student at Saint Ignatius’
College, enjoyed the assessment as it provided her with
the opportunity to use her commerce skills and apply
general knowledge.
“The assessment didn’t cover textbook
materials. Instead it focused on common
knowledge and related to everything from my
part time job to my bank account. I think it’s
important for students my age to understand
finances. We’re starting part time work and
we need to know how to manage our money,”
she said.
key FINdINgS
■
8% of Year 9 students understood how an ATM
7
dispenses currency
■
75% were able to compare credit cards
■
2% could use the exchange rate to calculate a cost
5
in Australian currency
■
8% of Year 9 students understood the term ‘debit’
4
on a bank statement
■
46% could calculate superannuation contributions
■
25% understood the term ‘credit’ on a bank statement
economics
& investment
This was the most difficult category in AFLA 2006. Many
questions required a formal understanding of economics and
investment that would come from participating in economics,
Business Studies or Commerce classes at school.
Despite the difficulty of the questions, 54% could calculate
profit using a graph of share prices and 50% understood
the term ‘ethical investment’.
key FINdINgS
■
54% could calculate profit using a graph of share prices
■
50% understood the term ‘ethical investment’
■
43% understood the term ‘capital gains tax’
■
43% understood the term ‘product disclosure statement’
■
33% could calculate the average Consumer Price Index
■
2% could identify the level of risk of different types
2
of investment
Boys generally outperformed girls in this category, perhaps
because they are more likely than girls to elect economics and
Commerce subjects*.
NOTeS *60% of students who took economics in the 2002 HSC were male.
except where stated otherwise, all statistics refer to averages of results
for Year 9 and 10 students.
22%
could iden
tify the lev
el of risk
of different types of investment
SAMPLE QUESTION
This table sets out some of the conditions of standard credit cards available from three different banks.
BANK 1
BANK 2
BANK 3
Interest-free period on purchases
Up to 55 days
0
Up to 55 days
Annual fee
$0
$30
$59
Interest rate
17.9% pa
16.9% pa
15.25% pa
Card type available
Mastercard
Mastercard, Visa
Visa
Rewards program
Frequent Flyer
No
No
Sam is attracted to Bank 1’s card because of the extra frequent flyer points he can earn when he uses his credit card.
He is a person who always pays his balance in full when his statement arrives.
Which of the following is another attraction of Bank 1’s card when compared to the other two cards?
(A) annual fee
(B) interest rate
(C)
card type available
(D) interest-free period on purchases
13
CASE STUDY
Richmond River High School
Lismore, NSW
mobile phones: a
cause for concern
Mobile phone usage was a key theme of AFLA 2006,
with results showing that:
In 2006, one hundred Richmond River High School
students in Year 9 Commerce and Year 10 Geography
classes sat AFLA.
■
5
0% of students could not interpret a table to compare
mobile phone plans
■
4
9% could not calculate the savings on SMS messages
According to Steve Dawson, Head Teacher for Human
Society and its Environment (HSIE), AFLA provides
obvious advantages not only to students and teachers,
but schools as well.
■
4
6% could not identify mobile phone costs using fine print
“It’s important for schools to focus on the development
of students as members of the community. This means
teaching them life skills, such as first aid and training
them for entry into the financial world.
“Assessments such as AFLA are relative to
all students as consumers of the world, and
it’s good for their personal development and
awareness. Particularly in Years 9 and 10,
financial literacy is an important skill and
very few students at this age have taken any
formal or compulsory subjects on this topic.”
Sarah Vidler, a Year 9 student at Richmond River High
School, believes it’s important to start learning about
financial literacy at her age.
“More than anything, I think AFLA was a good
reminder to me and my peers about being
responsible with the money we earn. We need
to start thinking about these things now.”
Steve identified an interesting dynamic in results among
those who sat AFLA.
“The students who sit at the top of the class in most
subjects didn’t perform as well as in this assessment
as they do in many others,’ said Steve. “This is
because AFLA isn’t an academic test, it’s based on
real life knowledge and those financially savvy students
outperformed the more scholarly students.
“From a teacher’s perspective, tests such as AFLA
create interest in subject areas such as commerce and
it’s always pleasing to teach students when they are
genuinely interested in the knowledge you’re sharing.”
Richmond River High School participated in AFLA in
2005 and 2006. The school was successful in winning
a Commonwealth Bank Foundation Financial Literacy
Grant this year and plans to introduce financial literacy
materials into its peer tutoring for Year 7 students.
This, combined with practical development for senior
students focusing on property and the pitfalls of real
estate, will ensure students at Richmond River High
School are prepared for Year 12 and what lies beyond.
Many students and teachers interviewed by the Commonwealth
Bank Foundation for the AFLA evaluation talked about issues
associated with mobile phone usage. Mobile phones are also
a source of contention for many parents, who are often left
to foot the bill.
Statistics show that consumer debt is rising, with youth debt
an increasing component. Of the 21,900 Australians who
declared bankruptcy in the financial year 2003, ten per cent
were aged between 15 and 24. Under the Bankruptcy Act,
up to eighty per cent of “part nine” debt agreements (deals
struck where people have relatively small debts of under
$20,000), included people running up debts because of their
credit card or mobile phone habits*.
The Commonwealth Bank Foundation believes that classroom
education is an appropriate place to scrutinise mobile phone
usage to ensure students are given adequate knowledge to
manage their phones.
Liverpool Girls High School recently used a Commonwealth
Bank Foundation Financial Literacy Grant to tackle poor usage
of mobile phones, with the aim of reducing some of the huge
bills being run up by high school students.
The program, introduced into the Year 9 Commerce class,
taught students how to read mobile phone contracts, including
the fine print. They were also shown how to look at the
differences between pre-paid and contract phones, peak and
off-peak rates, and the real cost of downloading ring tones.
The response to the lessons was immediate, with many
students using their new-found awareness of the pitfalls
of mobile phone ownership to save money.
The program is now an ongoing part of the curriculum for
Year 9 Commerce students at Liverpool Girls’ High School.
* Prushka, one of Australia’s premier debt collection agencies, June 2006
50%
could not interpret a table
to compare
mobile pho
or calculate the savings
14
ne plans
on SMS messages
46%
could not identify mobile
phone call
costs using
fine print
15
australian financial
literacy assessment
medal winners
Students who achieved a high distinction for their AFLA
performance in 2006 and whose performance has been
judged to be sufficiently meritorious will receive a
University Medal. This year there are thirty-two Medallists,
eleven from Year 9 and twenty-one from Year 10.
The Medals are awarded by the University of NSW, whose
subsidiary, educational Assessment Australia, has carried out
this assessment for the Commonwealth Bank Foundation.
006 AuStrALIAN FINANCIAL LIterACy
ASSeSSMeNt MedALLIStS NAtIONAL LIStINg
NSW/ACt
alik Salgado, Year 9
M
Baulkham Hills High School, Baulkham Hills
Kenneth Tam, Year 9
Baulkham Hills High School, Baulkham Hills
Melinda Norquay, Year 10, Caringbah High School, Caringbah
aniel Atkins, Year 9
D
Hunter Valley Grammar School, east Maitland
Todd Carson, Year 10, Merewether High School, Hamilton
James Thomas, Year 10, Merewether High School, Hamilton
Michael O'Shea, Year 9, Saint Ignatius' College, Lane Cove
Livia Lam, Year 10, Sefton High School, Chester Hill
QLd
Kimberley Manning, Year 9,
Ipswich Girls' Grammar School, Ipswich
enjamin Peters, Year 10,
B
Grace Lutheran College, Clontarf, M.D.C.
Joshua Chakravarty, Year 10, Somerset College, Mudgeeraba
Nigel Thomas, Year 10, Somerset College, Mudgeeraba
VIC
ictoria Bartlett, Year 9
V
Presbyterian Ladies' College, Burwood
John Biun, Year 10, Scotch College, Hawthorn
Francis Chan, Year 10, Scotch College, Hawthorn
Minh-Quan Nguyen, Year 10, Scotch College, Hawthorn
WA
J eremy Rogers, Year 9,
Christ Church Grammar School, Claremont
eixin Truong, Year 10,
P
Morley Senior High School, Noranda
rett Ripper, Year 10
B
Carnamah District High School, Carnamah
tAS
Andrew Lee, Year 10, Shore School, North Sydney
Jonathan Guy, Year 9, Circular Head Christian School, Smithton
Camus Ulloa-Jonsson, Year 9, Shore School, North Sydney
David Cocker, Year 10, Queechy High School, Kingsmeadows
J ames, Kozelj, Year 10, St Patrick's College
- Senior School, Strathfield
SA/Nt**
Barry Stanton, Year 10, St Patrick's College
- Senior School, Strathfield
Ryan Cassidy, Year 10, Thomas More College, Salisbury
Jacob Cao, Year 9, Sydney Boys High School, Moore Park
* Medal Winner in 2005
** A student from O’Loughlin Catholic College, Karama, NT,
was also awarded a Medal. The name has been withheld.
Jason Wong*, Year 10, Sydney Boys High School, Moore Park
Zhi Zu, Year 10, Sydney Boys High School, Moore Park
Todd Da Silva, Year 10, Sydney Technical High School, Bexley
uke Boyling, Year 10,
L
Wagga Wagga High School, Wagga Wagga
6
“I think it’s very
important for students
my age to start financial literacy now,
particularly as we start part-time jobs.”
Shyamal Singh, Year 9 student, Liverpool Boys High School, Liverpool, NSW
“I will buy a house one day, as will most other kids my age,
so it’s important
to understand contracts
and money.”
Zhi Zu, AFLA 2006 Medal Winner, Sydney Boys High School, Moore Park, NSW
“I do
enjoy the responsibility that comes
with making financial decisions and I always feel better
knowing that I’m spending wisely.”
Daniel Atkins, AFLA 2006 Medal Winner, Hunter Valley Grammar School, East Maitland, NSW
For more information
on the Commonwealth Bank Foundation
visit commbank.com.au/foundation
email [email protected] or
phone + 6 (0) 93 Or write to the Commonwealth Bank Foundation at:
Level 3, 48 Martin Place
Sydney NSW 2000 Australia
© 2006 CommFoundation Pty Ltd ACN 094 234 812
Photography taken at Sefton High School, Chester Hill, NSW and Hunter Valley Grammar School, east Maitland, NSW
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