Towards the close of last term’s trade fair, Milperra Public School Years 5 and 6 students realised they were going to have to make some tough financial decisions – slash hundreds of “milpies” from the price of cupcakes or be left literally holding the bag.

The trade fair – involving the whole school and students from Maitland East Public School – is part of the Lifeskills Microsociety Program aimed at developing consumer and financial literacy.

Milperra Public School teacher Jan White says the Lifeskills program gives students the opportunity to earn and spend school currency (known as milpies at Milperra Public) while developing important financial skills.

“I think it’s one of the best things I’ve ever seen in a rather long career,” Ms White says.

“The kids learn quickly how to do percentages, fractions, divvy up their spoils, work out what’s a good, fair price, and how the market reacts to altering the price and to advertising.” Lifeskills was pioneered about 15 years ago by Maitland East Public School teacher Steve O’Mara, and has since been adopted by about eight schools in the Maitland- Newcastle area, and by Milperra Public in Western Sydney region.

It has also now been profiled as a leading-practice example of how consumer and financial literacy can be incorporated across the school curriculum by the Australian Government Financial Literacy Foundation’s Consumer and Financial Literacy Professional Learning Program – Teacher Guide.

“Overall, [Lifeskills] gives kids the infrastructure to be able to explore their own society,” Mr O’Mara says.

“They can recreate the big, wide world within the safety and security of their own school. Everything’s scaled down and this becomes their own little micro-society, which they get to manage themselves.” Students run the economy, which they regulate through a school parliament.

Although Milperra Public’s trade days include all students, Ms White says she limits daily involvement in the program to Years 5 and 6, who earn milpies through contributing to the school economy.

“Some do regular banking jobs or environmental jobs; they run the worm farms or recycle the cans, pack printer cartridges up [for recycling]. Some people prefer to do casual jobs … they don’t want to give up lunchtime to get money,” Ms White says.

Students deposit and withdraw their funds from the school bank.

In the first weeks of term they accrue interest at “something ridiculous like 50 per cent to encourage saving”, a figure that gradually drops to encourage spending later during the year.

As the students create enterprising ways to generate income, they also encounter ethical and business dilemmas similar to those they will encounter as adults.

For the students of East Maitland Public, the major source of income is from the school’s yabby farm, which sells the freshwater crayfish as novel pets.

Mr O’Mara says the school breeds thousands of tiny yabbies year-round, for which local demand is constant.

“You create all sorts of business dilemmas for students. For example, say we’ve established there’s a market for our yabbies at Frank’s Fishing Shack as bait. Do we want to sell our yabbies as bait?” he says.

The Lifeskills program has been so successful in recreating a micro-society that in 2005 Mr O’Mara negotiated with the Reserve Bank to create a common currency “mutuals” across participating local schools.

The currency takes its name from the Maitland Mutual Building Society, the central bank for the program.

Several local retailers including the “twodollar shop” accept mutuals as legal tender, later exchanging them at the building society for Australian currency.

Mr O’Mara says he is currently in discussions to develop a statewide Lifeskills currency and is conducting workshops with schools interested in implementing the program and broadening the trade network.

“It’d certainly be great to have a currency that can be accessed across the state – you know, you might even have a big entertainment centre [trade fair] event. Schools get together for sports, they get together for music and dance – why not get together for finance, business and enterprise?” he says.

To judge the viability of interschool trading, schools need to look no further than Milperra’s recent success – and the few cupcake crumbs left on the plate.