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Paul Clitheroe to lead new Macquarie University financial literacy initiative

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News created: 20 Nov 2012

Many Australians struggle to cope with the world of money, which is more complex today than ever before. High levels of credit card debt, mortgage stress, bankruptcies and financial fraud are some of the damaging outcomes.

As part of its strategy to help combat these problems, Macquarie University will tomorrow announce the appointment of well-known finance analyst, advisor and media commentator, Paul Clitheroe AM to a new Chair in Financial Literacy.

Financial literacy is the ability of an individual to understand the language and operation of the financial environment, and use that knowledge to best manage their personal financial health.

Paul Clitheroe is Chairman of the Australian Government Financial Literacy Board and Executive Director of ipac securities.

In his new role he will lead Macquarie University’s research and teaching of financial literacy, which already includes a popular undergraduate course that targets non-business students.

A surveys of students in Macquarie’s Principles of Financial Literacy unit found that on completing the subject:

  • 86% said they had a better understanding of investment and saving money
  • 80% felt encouraged to maintain a weekly budget
  • 82% were motivated to begin planning their financial future
  • 86% said they now had the ability to manage credit cards better

Executive Dean of the Faculty of Business and Economics at the University, Professor Mark Gabbott said the establishment of the Chair would lead to many public benefits.

“Firstly, we want to give our students the skills to better navigate today’s complex financial world, and the Chair will have an active role in teaching and in curriculum development,” he said.

“We want to perform, interpret and communicate research that gives society, government and the finance sector insights into how to improve financial literacy in our community.

“Paul’s professional career has been dominated by a commitment to improving everyday Australians’ understanding of money, and we couldn’t ask for a more experienced or respected advocate for financial literacy.”

As Chair of Financial Literacy at Macquarie University, Clitheroe will:

  • Lead, commission and disseminate research
  • Provide policy commentary and advice
  • Improve financial education and awareness

Clitheroe says the great attraction of the role was the opportunity to influence generational change.

“Macquarie University teaches thousands of students from across Australia and around the world every year. If we can improve the financial literacy of these students as 18 and 19 year olds, we can not only help ensure they gain the benefits throughout their lives, but also positively influence their children from the earliest age.

“I’m also very keen to add to the worldwide body of research into financial literacy, and to work with such a well regarded faculty.”

Research shows that many individuals lack the most basic financial literacy skills. They generally earn lower incomes, are less able to withstand sudden financial shocks, and are less able to pay their bills.

The UK Financial Services Authority argues that better financial education would result in more successful pension and health care reforms, greater private saving rates thereby reducing future public expenditure pressures, and contributing to economic stability and development.

Similarly, the Commonwealth Bank Foundation report argued that improvements in financial literacy could reduce unemployment, reliance on welfare benefits, improve decision‐making abilities (and therefore productivity) in the workplace; and reduce capital wastage. The report also saw potential to strengthen national savings, boost public and private consumption, inject capital into major industries, and create more small businesses.

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