“Evidence tells us the current approach means too many students leave school without the financial skills they need,” Hipkins said.
“Over the past six years, Labour has been growing financial teaching capability through making it a core part of the School Leavers Toolkit and encouraging partnerships with banks to provide education and advice in schools – but more needs to be done.”
Financial literacy will start in primary school and be taught mainly through maths and social sciences in secondary school.
It will be based on the existing “financial capability progressions”, with a focus on saving and investing, budgeting, setting financial goals, consumer rights and taxes and income.
“All young people will leave school with a core knowledge of saving, budgeting, banking, borrowing, bills, taxes, KiwiSaver, mortgages and insurance,” Hipkins said.
“We’re setting kids up with core skills that’ll teach them how to save for a home or their retirement, or become the innovators and entrepreneurs of the future.”
Addressing media in the Waikato this afternoon, Hipkins said that over the last six years in Government, Labour had been focused on setting children up for a prosperous life beyond school.
He said today they are announcing the next step, which is to make financial skills compulsory in schools.
“We know that too much has been left to chance previously in kids’ learning, and that’s why we’ve focused on making sure we’re getting a better handle on the basic skills around reading, writing and maths.”
He said to set up young people for success, they need to understand the basics of budgeting.
“They need to understand basic financial concepts. They need to understand how to be good with money. They need to understand things like interest rates, KiwiSaver, insurance, debt, borrowing.”
Hipkins said other countries have already done so, and New Zealand has a bit of catching up to do.
“Now is the right time to make the teaching of financial skills core content,” he said.
He said a Labour Government will be creating a “wide range of resources” to help schools with that teaching, but more work would be done over the next year or so.
Hipkins said it shouldn’t matter what circumstances you were born into - you should still be able to learn concepts to help you.
“All young New Zealanders need to be learning basic skills around money.”
Too many young people, he said, were getting into debt without fully understanding what it meant.
Across the world, more schools are putting more work into financial literacy, Hipkins said.
Implementing the policy would be one of the first tasks for the Ministry of Education’s new curriculum centre.
When asked how the results would be measured, Hipkins said schools would report results twice a year, and these would be measured as part of this process.
Like a lot of New Zealanders, Hipkins said he learnt more about financial literacy after he left school.
On why Labour was making it compulsory, he said people needed to understand things like compounding interest before they found themselves racking up interest on purchases.
Tinetti said Labour had delivered New Zealand history in schools by ensuring there was a clear framework in place within the curriculum so that it would be taught as part of an existing subject.
Financial skills in schools will be delivered the same way, mainly through maths and social sciences, as this is where existing resources are aligned.
“Schools will still have flexibility as to how they deliver the programme, but there will be essential learning outcomes at different year levels,” Tinetti said.
“An important part of our plan will be making sure teachers feel they have the necessary skills and resources to teach it, and that they need to prioritise it within their classrooms.
“This won’t be an extra demand on teachers - rather, it will make sure they have what they need, including access to existing programmes and partnerships and support through the newly established curriculum centre at the Ministry of Education.
“I’m incredibly excited by this policy that will teach kids practical, financial skills that they will use for life.”
Secondary Principals’ Association of New Zealand president Vaughan Couillault said schools, particularly secondary schools, have been teaching financial literacy for quite some time.
“It’s not unwelcome, it’s probably not a big shock to the system, and in some places, it’s something that they would have had in place for quite some time, and I’ll just be reinforcing it.”
He said the devil will be in the detail regarding what that compulsion looks like.
“If that compulsion is eight hours a week, that will be quite challenging to fit into an already relatively packed curriculum from a junior secondary perspective.”
He said in the secondary school space, they have been paying attention to financial literacy for quite some time, but there may be inconsistent application across the country.
“Schools like mine, we’ve been working on financial literacy for quite some time, and valuing it particularly in our Year 9 programme, where it’s a compulsory part of our Year 9 programme, and so, it’s probably just applying a consistent measure across the country.”
