Finance leaders call for increased financial literacy and warn of ‘significant potential risks’

Senior leaders in Australia’s finance industry have urged caution amid headlines of optimistic growth of the nation’s rebounding economy.

Speaking at Nine’s State of the Nation finance event on Wednesday, Effie Zahos, finance commentator at Nine, acknowledged the rebound of consumer spending, the strength of real estate prices, and low interest rates, but asked delegates at the morning’s panel session: “at what cost?”

Effie Zahos

“For me, it’s a case of where that consumer spending is coming from,” Zahos said. “What we’re seeing now is this confidence in spending – some of us are cashed up, but others are not. And a lot of disruptors are coming through that change the way we’re spending. Are we spending on credit? Or is it actually our cash flow? So much focus is on trying to reduce mortgage repayments, but I think we’re missing the point – the point should be, try to knock back debt. There’s no point consumers securing the cheapest interest rate at the moment – yes, it has a benefit, but are you able to known down that debt?”