Election 2023: Labour launches financial literacy in schools policy

Labour plans to make financial literacy compulsory in schools from 2025 to address low levels of money and budgeting skills among school leavers.

Prime Minister Chris Hipkins, speaking as Labour leader, and Education Minister Jan Tinetti, in her capacity as party spokeswoman, announced the policy in Hamilton today.

“Young people will leave school knowing how to budget, open a bank account, manage bills and save and invest their money as part of a financial skills in schools programme,” Hipkins said.

“We want all young New Zealanders to leave school knowing how to manage their finances. It’s too important to be left to chance.”

The party cited past studies that found just 18 per cent of teachers taught the skills in schools and a Retirement Commission study found 80 per cent of young people surveyed wished they had learned more about money at school.

“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 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 Waikato this afternoon, Hipkins said that over the last six years in Government, Labour had been focused on setting children up in school for a prosperous life.

He said today they are announcing the next step, which is to make financial skills compulsory at school.

Hipkins said other countries have 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 there’s more work to be done yet.

“All young New Zealanders need to be learning basic skills around money.”

This work will occur over the next year or so, he said.

Hipkins said it shouldn’t matter what circumstances you are born into, you should still be able to learn concepts to help you.

There will be a range of support available for teachers, including curriculum resources.

Hipkins said until now he had been focused on improving the curriculum. He said financial literacy was another area which should not be left to chance.

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.

On how the results would be measured, Hipkins said schools report results twice a year and this would be measured as part of this.

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 they want to make sure financial literacy is not left to chance.

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 is 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.”