Opinion: Financial literacy is about more than personal responsibility

NZ's 2027 curriculum will teach financial literacy but may overlook systemic economic issues. Photo / 123RF

Financial literacy will become a core element of the New Zealand social sciences curriculum for Year 1-10 students from 2027. But what is being proposed presents a limited picture of the factors influencing people’s financial wellbeing.

The specifics of the curriculum have yet to be released. However, the Government’s announcement emphasised a focus on individual responsibility. Young people will be taught what they need to live within their means and how to accumulate enough wealth for retirement.

When announcing the new curriculum, Commerce and Consumer Affairs Minister Scott Simpson said: “We are all consumers, and financial literacy can set young Kiwis up to be savvy consumers – whether it’s knowing how to invest wisely, choose the best loan at a bank, or even identify a scam.”

However, as our research shows, focusing only on individual responsibility risks ignoring the economic systems – and inequities – that shape young people’s lives.

Inequality in New Zealand has risen significantly in the past three decades. And the richest New Zealanders pay less tax than in similar OECD countries.

Knowing how to manage household accounts is, undeniably, an important skill. But individual skills can’t necessarily overcome the hurdles within the broader economic and social context.

Focus on managing money

Financial literacy – under the term “financial capability” – is only briefly mentioned in the current New Zealand curriculum. The topic is positioned as a potential outcome of learning across different subject areas, rather than taught as its own distinct class.

Classroom resources focus on individual actions. Students are taught to manage money, set goals and manage risks.

There is no real discussion of economic inequality in the curriculum. And even the few references there are have a strong focus on personal responsibility.

Teaching resources available for senior economics, for example, explore topics such as income, taxation, product costs and the scarcity of resources.

In senior business studies, references to economic inequality are indirect. For example, the “key concepts” page alludes to ideas such as “supply and demand” and “scarcity” that can loosely be associated with economic inequality. But it is not explicit.

The resources being used in the classroom also exclude any significant discussion of broader economic systems and policies. Much of what is currently available is created in partnership with banks and financial organisations such as ASB’s GetWise and BNZ’s SavY programmes. These focus on budgeting, saving, banking and paying off debt.

Towards collective responsibility

Globally, there has been a growing emphasis on financial literacy education, partly because of the complexity of modern financial products. And, as one study observed, “the risks of, and responsibility for, financial decisions are being increasingly shifted from governments and employers on to individuals”.

As political economist Chris Clarke has noted, there is an “irreconcilable gap” between the aims of financial literacy education and people’s “actual success in securing their security and wellbeing through financial markets”.

Other economists have pointed out how issues of intergenerational wealth and entrenched socioeconomic disadvantage – the “racial wealth gap” – cannot be overlooked when talking about “poor financial choices and decision making”.

But another form of financial literacy education is possible. Young people could be taught to understand and analyse how governments make decisions for the financial wellbeing of their citizens. They could also learn the value of employment rights, labour and workplace safety laws, and the role of unions and other civic initiatives.

Rather than focusing on taxes and balancing household accounts, students could learn about their individual responsibilities within the economic systems they are part of.