Governments and financial institutions must step up to better protect Australians from the significant toll of financial abuse, a parliamentary committee has recommended.
A new report tabled by the Parliamentary Joint Standing Committee on Corporations and Financial Services has shown just how widespread financial abuse is in Australia, with a direct cost to victims estimated at $5.7 billion. This form of abuse is far more frequently perpetrated by men against women.
Adopted unanimously, the report identifies widespread misuse of financial platforms and products, alongside government services, to facilitate and perpetuate coercive control and abusive financial behaviours.
According to the Australian Bureau of Statistics (ABS), 27 per cent of women in Australia — approximately 2.7 million women — have experienced violence, emotional abuse, or economic abuse by a cohabiting partner. Furthermore, 16 per cent of these women, or 1.6 million, have suffered from partner economic abuse, compared to 7.8 per cent of men.
“Financial abuse is primarily experienced by women and children, and is primarily perpetrated by men. It is a quiet but raging epidemic that ruins the lives of those it affects. It has got to stop,” said Deborah O’Neill, Chair of the Committee, adding that the likelihood for harm is “even greater for First Nations people, the elderly, culturally and linguistically diverse Australians, and those living in remote and regional communities.”
“There are the men who perpetrate financial abuse, but there are also the men and women in the corporate world who for too long have been blind to the damage they facilitate.”
“Banks and financial institutions can and should be on the frontlines of identifying and stopping financial abuse. They have enough data and digital capacity to do so. It has to become a priority.”
Withholding child support payments
Based on the evidence received by the inquiry, O’Neill said abusers’ can gain financial control over their victims through access to superannuation, or by withholding child support payments, which not only hurts parents but also “robs children of the support that they need to thrive”.
The report found that nearly half (47 per cent) of women using the Private Collect system for child support were pressured by their ex-partner to avoid payments, with 70 per cent of these women failing to receive payments in full or at all.
Zaneta Mascarenhas MP said that the inquiry into financial abuse in Australia “uncovered issues” they did not anticipate.
“The inquiry has highlighted the prevalence and devastating impact of financial abuse. The statistics are shocking – $1.7 billion in unpaid child support is just one example,” said Mascarenhas.
“We’ve seen how systems and financial products are weaponised to inflict harm – harm that prevents victim-survivors from recovering and moving forward. Superannuation, credit and debit products, mortgage arrangements – all of these can be turned into tools of abuse. This must stop, and we all have a role to play.”
Key recommendations
Within the report, 61 recommendations are made to government, financial services providers and key stakeholders, which aim to minimise the prevalence and impact of financial abuse.
O’Neill said these recommendations “are a testament to the strength of the countless victim-survivors who shared their stories throughout the course of this inquiry. Their bravery in pursuit of the national interest has enabled the committee to deliver this unanimous report.”
Key recommendations made by the committee include establishing an ongoing mechanism for government and victim-survivors to co-design reform aimed at mitigating financial abuse.
It also calls for changes to consumer credit legislation, standard operating guidelines for the referral of reasonably suspected or reported financial abuse and anonymous reporting mechanisms.
Enhanced protections for victims in superannuation and insurance claims are needed as well.
“We also call for a review of child support arrangements to ensure that victims and their children are not financially exploited through the withholding of support payments,” said O’Neill, in a statement.
“The evidence gathered through this inquiry has made it clear that financial abuse is a national issue that cannot be ignored. This issue is not just about individual harm; it is a systemic problem that is compounded by gaps in regulation and law, lack of awareness, and complicity within and across financial institutions.”
“Financial abuse is now a national conversation, and together, we will ensure it no longer remains hidden in the shadows.”
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