School banking programs, like the Commonwealth Bank’s Dollarmites, will be officially banned in the ACT from July, following a similar move in Victoria last year.
The motion was unanimously passed in the Legislative Assembly on Wednesday, following a review by the corporate watchdog in 2020 concluded school banking programs did not help students’ financial literacy.
The Australian Securities and Investments Commission report found school banking programs were used as a strategic tool by banks and financial institutions to market their products to young children.
It also found banks were paying schools to encourage them to get students on board with school banking programs in exchange for the authority to market to vulnerable children.
The ACT government had been consulting with students, the Australian Education Union and other educational institutions on the motion, deciding that ASIC’s MoneySmart program and other Government resources were a better alternative.
The decision to move schools away from financial institutions was initiated by ACT Greens MLA Johnathan Davis, who said: “Corporations have no place in our public education system”.
"The federal government's Money Smart and the Australian Curriculum, Assessment and Reporting Authority have both developed financial education resources ... that [are] far more comprehensive and up-to-date.
"[Banks] use school resources and much-needed volunteers to market their products to school students."
Education minister Yvette Berry supported the motion saying community consultation found students were not satisfied with the financial education they received in school.
"We know that children want to learn about money, and we know school banking programs don't provide that learning."
Victoria made the move in November last year, but it officially came into force from 1 January this year.
At the time, Victorian education minister James Merlino said banks and financial institutions used “inappropriate tactics” to lure children into building loyalty with the banks.
Consumer advocate group Choice awarded Commonwealth Bank’s Dollarmites program, which was launched in 1931, a “Shonky” in 2018, for its “disgraceful” sales practices.
“The Dollarmites program uses slick marketing to target primary kids at school, turning them into long-term customers of a bad-value bank,” Choice CEO Alan Kirkland said.
Barefoot Investor Scott Pape has also been a long-standing adversary of the program.
In 2015, Pape slammed Commonwealth Bank for its “cutthroat” behaviour, comparing their tactics to that of dodgy financial advisors.