ANZ in the communityQuarterly newsletter

March 2005

I am pleased to provide you with this updateon the progress we are making with our community programs and partnerships, and the goals we have set for the year ahead.

All of us at ANZ understand we have a role to play in helping toimprove the circumstances of people facing disadvantage andimproving the sustainability of our communities.

The need for corporations to build a more balanced agenda aroundtheir stakeholders by contributing more widely to the communitywas highlighted to us all by the terrible devastation and loss causedby the tsunami in Asia. I was inspired by the efforts of our staff indonating money and contributing time to the relief effort.

That experience, and the outcomes we have achieved in 2004, hasreinforced our view that we can have the greatest impact when wefocus on activities that share our expertise with others and makeuse of our size, scope and resources to contribute to communityneeds. In particular we are focusing on increasing financial literacylevels in Australia and supporting important grassroots projects inlocal communities.

I'm confident that this approach is having a positive and lastingimpact, and I look forward to updating you on our progress duringthe coming year.

John McFarlaneChief Executive Officer, ANZ

About Saver PlusSaver Plus is a financial literacy and matched savings program helping familieson low-incomes improve their financialknowledge, build a long-term savings habitand save for their children’s education.

The program provides parents or guardiansof secondary school children with personalfinancial coaching, financial education andan incentive to save for education costsby matching every dollar saved with an additional $2, up to $2,000 in matched funds.

ANZ and the Brotherhood of St Laurencedeveloped Saver Plus and have been pilotingthe program, along with Berry Street Victoriaand The Benevolent Society, since July 2003.

Saver Plus newsIn December 2004, 257 families fromFrankston and Shepparton in Victoria and Campbelltown in New South Walesachieved their savings goals and beganaccessing their matched savings.

By the end of January 2005, more than$398,000 has been distributed toparticipants, with the most commonlypurchased education items including homecomputers, uniforms, text books, schoolcamps and musical instruments.

In February 2005, RMIT University released a research report evaluating the program'sprogress following participant focus groupsin October 2004.

"The key piece of feedback we continuallyreceived from participants is about the value of the three elements of Saver Plus,"said Dr Roslyn Russell of the RMIT ResearchDevelopment Unit.

"It has become clear that the matched savings is a definite ‘hook’ that initiallyattracts the participants, but the educationand the personal support have been the sustaining factors. Participants have notedthat saving is now a way of life for them, andit’s almost like the matched savings are abonus," Dr Russell said.

Our goals for 2005In September 2004, ANZ committed a further$1 million to the Saver Plus pilot to enableup to 500 new families to save for their children's education in 2005. The second savings period will see Saver Plus programs again delivered inFrankston and Shepparton in Victoria,Campbelltown in New South Walesas well as parts of South East Queensland with new partner, The Smith Family.

My son loves the new computer. But the great thing ishe’s 15 and he’s into the savings habit now that he hasa part-time job. He can see that I’ve saved and knows asmall amount adds up to something big.

Simon, a participant from Frankston (above, left), with his son Matt and the family's newcomputer purchased through Saver Plus.

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Saver Plus has meant an amazing change in my life. It’staught me to save from a background of nothing. The kidscan ask me for something now and I can say I’m capableof saving for that … and I’ve never, ever felt so proud ofanything in my life.

Julie, a participant from Shepparton (above, right), and her relationship manager atBerry Street Victoria, Tracy Pell.

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About MoneyMindedMoneyMinded is Australia's firstcomprehensive adult financial educationprogram developed to help communityeducators and financial counsellors assistpeople, in particular those on low incomes,to build their financial knowledge and makeinformed decisions about their money.

MoneyMinded was written by financialcounsellors working with the NSWDepartment of Education and Training, and its development was funded by ANZ.MoneyMinded provides unbiased consumereducation and does not promote anyfinancial products or services.

MoneyMinded newsANZ is now funding the Brotherhood ofSt Laurence, Berry Street Victoria, TheBenevolent Society and The Smith Familyto trial MoneyMinded.

RMIT University is evaluating this trialbetween February and April 2005, and will release its report in May 2005 – the recommendations of which will be used to enhance the MoneyMinded program.

ANZ is also funding MoneyMinded facilitatortraining for interested community agenciesand financial counselling networks.

This training program was written and isdelivered by Suzanne Gunningham of theVictorian Department of Education andTraining. It familiarises participants withMoneyMinded content and structure, offerstips in facilitating adult education, and provides a training manual that can be used to train other facilitators. To date, over 90 financial counsellors and communityeducators have completed MoneyMindedfacilitator training.

Our goals for 2005ANZ understands the importance offace-to-face delivery of financial literacytraining and that it is the most effective way to reach low-income earners who are disadvantaged through a low level offinancial knowledge. By continuing to workwith community organisations and financialcounselling agencies that are best placed to reach the target audience, it is our aimthat 10,000 consumers will participate inMoneyMinded workshops in 2005.

For more information about MoneyMinded,visit www.moneyminded.com.au

I found MoneyMinded very comprehensive and that itcovers most areas that financial counsellors, social workersand community advocates would deal with in their dailyclient contact work. I would recommend this package as avery useful tool in our battle to instil financial literacy at alllevels in the community.

Marianne Mayer, President, WA Financial Counsellors Association

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Planning & saving

Easy payments

Understanding paperwork

Living with debt

Everyday banking & financial products

Rights & responsibilities

Community Development Finance

About CommunityDevelopment FinanceCommunity Development Finance is anumbrella term, which encompasses programsthat aim to address financial exclusion such as small loans, loans for enterprisedevelopment, matched savings schemes,insurance, financial counselling and advice,and financial literacy training.

Following research and extensive stakeholderconsultation, ANZ has committed to contribute $3 million over three years to arange of initiatives to help those people, particularly those on low incomes, accessmainstream financial products.

ANZ's interest in this area reflects our concern to respond to those issues whichdirectly relate to the relationship betweenfinancial services organisations and the community.

Community DevelopmentFinance newsFinancial exclusion is a very real issue inAustralia, and research carried out for ANZby Chant Link and Associates shows:

around 120,000 people, or 0.8% ofAustralia’s adult population, could be considered totally excluded with no ownership of financial products

around six per cent of adults have minimal financial access, owning onlya transaction account

risk factors influencing financialexclusion include unemployment, poverty, disability or long-term illnessand low education levels

factors causing long-term financialexclusion include financial illiteracy,learned dysfunctional credit or savingsbehavior and intergenerational exclusion

special factors affect IndigenousAustralians who are the only ethnic groupin Australia consistently associated withfinancial exclusion.

Our goals for 2005In response to the research findings andANZ's stakeholder consultation program, we have committed to:

fund additional resources to assist thedelivery of MoneyMinded financialeducation to 10,000 potentially ‘at risk’Australians in 2005, including Indigenouscommunities

expand ANZ’s Saver Plus matched savingsand financial literacy program intoIndigenous communities

initiate micro-finance programs includingfunding, financial literacy education, mentoring and support to facilitate thedevelopment of Indigenous businesses –delivered with the assistance of localcredit unions

commence the development of a newloans program tailored to the needs ofpeople on low incomes who are currentlyusing ‘payday’ lenders and other fringecredit providers

undertake further research into adultfinancial literacy levels and whether thereis a connection between low levels offinancial literacy and individuals’ abilityto manage credit. This follows ANZ'scommitment to undertake research intoAustralian financial literacy levels everytwo years. The findings will be releasedmid-2005.

Through our work with people on low incomes, we know that too many Australians can't meet their most basic needsbecause they have no access to financial services. ANZ'sfocus on people currently excluded from banking will have an amazing impact on the self-confidence and self-esteem of many individuals and families. It will help people out ofpoverty and reconnect them with society, making for a fairer, more inclusive Australia.Catherine Scarth, General Manager Community Services, Brotherhood of St Laurence

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Our research indicates low-income consumers need, from timeto time, to borrow money to pay for such essential items asutility bills, car registration, children's clothing or food.Unfortunately, they have been forced to use payday lendersand other fringe credit lenders who charge rates as high as 1300% per annum. These initiatives by ANZ will allow low-income consumers to borrow money in the mainstreamcredit market in a sustainable and non-exploitative way.Chris Field, Executive Director, Consumer Law Centre

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World Vision Australia has been overwhelmed by the support we have received from ANZ management andindividual staff members. Without ANZ's support andefforts from literally the first day of this disaster we would not be able to provide much needed help to those affected.

Toby Hall, Chief Operating Officer, World Vision Australia

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ANZ international offices’ contributionsANZ's international offices have also supported both local and internationaltsunami aid appeals:

New Zealand – over $1.2 million donatedby ANZ corporate, staff and customersto World Vision, Oxfam, Red Crossand UNICEF

Indonesia – $450,000 donated by PaninBank and ANZ Panin to the IndonesianCentral Bank's tsunami appeal

Singapore, Hong Kong, Fiji – $33,760donated to Red Cross, World Vision andother agencies

India – $70,000 donated to the IndianPrime Minister's Relief Fund and other agencies

London – $50,290 donated by ANZ andstaff to World Vision and Red Cross.

Following the devastating Boxing Daytsunami, ANZ, our international offices andstaff have given more than $2 million indonations and 4,200 hours of volunteerassistance towards major relief efforts.

ANZ Australia contributionsIn Australia, ANZ has donated $1.45 millionto World Vision:

More than 5,000 ANZ staff have donated$500,000, which has been matched dollar-for-dollar by ANZ as part of ANZ'sCommunity Giving program

ANZ Group made an initial donation of $200,000

ANZ Chief Executive John McFarlane madea personal donation of $250,000.

Additionally, more than 600 staffvolunteered over 4,200 hours of paid volunteer leave and their personal time towork in World Vision, Red Cross and Oxfamcall centres and assist with data processing.

Don Lee, a Global Cards Business Analystwith Operations Technology and SharedServices, pictured right, took volunteer leaveto work at a World Vision call centre. "Theexperience gained from working at WorldVision for the day was invaluable for me,"he said. "It opened my eyes to the generosityof the Australian people who were so willingto give what they could to help those affectedby this tragedy."

Customer and public donations made viaANZ branches and ANZ BPAY® have totalleda further $6.86 million for World Vision and$2.88 million for UNICEF.

Tsunami relief effort

John McFarlane (right) presents World VisionChief Executive Officer, Tim Costello, with a cheque for $1,000,000 from ANZ staff donations, matched dollar–for–dollar by ANZ.

John McFarlane and Tim Costello with ANZConsumer Finance staff who volunteered forWorld Vision during the tsunami appeal.

Don Lee, from ANZ Operations Technologyand Shared Services, working the phonesat a World Vision call centre.

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In addition to ANZ's national programswhich focus on financial literacy and financial inclusion, ANZ and our people support grassroots community programsthat aim to foster community well-being and prosperity in the communities where we live and work.

In April 2005, ANZ will introduce CommunityGiving, a workplace giving program enablingall Australian staff to make pre-tax donationsto nominated ANZ partner charities. As partof Community Giving, ANZ will match staffdonations dollar-for-dollar, up to $1,000 per staff member and a total of $1 millioneach year. ANZ is targeting a participationrate of 10 per cent in the six months toOctober 2005.

ANZ Community FundThe ANZ Community Fund enables staffworking in ANZ branches to provide financial and in-kind support to important,unique, local causes. In 2003-04 ANZbranches gave more than $330,000 to 151local initiatives. In 2004-05, ANZ aims togive $350,000 to local communities throughthe ANZ Community Fund.

Seeds of RenewalThis year ANZ will again partner with theFoundation for Rural and Regional Renewalto deliver a small grants program to smallrural communities. This year's program will make more than $350,000 available in grants for projects which aid in the growth of a town with heritage, tourism or environmental themes.

Last year, Seeds of Renewal contributed$300,000 to 59 local projects in ruralAustralia with a focus on building the sustainability of rural communities.

All full-time ANZ staff can take up to eighthours paid leave each year to provide volunteer service to local community causesimportant to them. Between October 2001and September 2004, ANZ staff gave over34,420 hours in both team and personalvolunteer activities. Our goal for 2004-05 is to increase this figure by another 20,000 hours.

Most recently, over 600 staff volunteeredmore than 4,200 hours to work at the World Vision, Red Cross and OXFAM call centres in the weeks following the tsunami in South East Asia. ANZ staffwill also be entitled to take two daysin volunteer leave to participate in the 2006 Commonwealth Games.

ANZ Staff FoundationThe ANZ Staff Foundation, funded half bystaff and half by ANZ, provides small grantsto Australian charities for projects that helppeople build skills and independence, protect the environment, support localcommunity initiatives and assist communityorganisations build their capacity. In 2003-04the foundation donated $179,448 to 16 not-for-profit organisations.

Our people supporting their communities

ANZ Kadina came to the rescue of the Kadina Country Fire Service(CFS) when plants from their three-week old garden were stolen.Staff and the CFS coordinated a sausage sizzle that raised $210,which was then matched dollar–for–dollar by the ANZ CommunityFund to total $420 for new plants.

Children in Macleay, NSW enjoy a much-needednew playground at the Upper Macleay SportsClub, funded by Seeds of Renewal. Families in northern NSW often travel an hour-and-a-half to Macleay for sporting activities and the playground is welcome and safe entertainmentfor younger family members.

making your contribution count

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For more information on ANZ's community programs and approach to creating a sustainable future, or to provide any feedback, please contact:

Patricia TooheyHead of Group Community RelationsTel: 03 9273 6871tooheyp@anz.com

http: www.anz.com/aus/aboutanz/Community/

Hilary FastierManager, Community RelationsTel: 03 9273 0994fastierh@anz.com