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Speech to the Private Member's Motion on International Year of Cooperatives

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© 2010 Luke Hartsuyker - Federal Member for Cowper | Site by Walker Multimedia





Private Member's Motion on International Year of Cooperatives

June 25,2012 I move: That this House: (1) notes that: (a) 2012 is the International Year of Cooperatives; (b) there are two million more cooperative members in Australia than retail share investors; (c) cooperatives create diversity in the Australian economy; (d) cooperatives play an important role in delivering services to regional and rural communities; and (e) some Australian Government industry assistance is not available to enterprises with a cooperative structure; and (2) calls on the Government to: (a) support the role of cooperatives in Australian communities; and (b) continue working with the States and Territories to implement nationally consistent laws governing the operation of cooperatives. Cooperatives play a key role in the Australian economy but are often overlooked as a business model and not appreciated for the benefits that they bring to regional communities. 2012 is the International Year of Cooperatives and 7 July is the International Day of Cooperatives, so it is very appropriate for us to be debating this motion at this time. A cooperative is simply an alternative business structure which operates for the benefit of cooperative members, rather than for the benefit of investors or shareholders. To put it simply, a cooperative is just a group of people cooperating for their mutual benefit. Cooperatives around the world operate in accordance with seven guiding principles: firstly, voluntary and open membership; secondly, democratic member control; thirdly, member economic participation; fourthly, autonomy and independence; fifthly, education, training and information; sixthly, cooperation among cooperatives; and, finally, concern for the community. Community is a very important issue in relation to cooperatives. There are around 1,800 cooperatives in Australia, with more than 7.5 million members. Cooperatives operate in many areas of the economy including agriculture, financial services, fishing, housing, insurance and even child care. Many people would not be aware that cooperatives have a unique top-level domain which is .coop, instead of the traditional .com. The top 100 Australian cooperatives, credit unions, and mutuals turned over $14.7 billion in 2011. Many cooperatives are well-known brands in Australia, including Cooperative Bulk Handling, or CBH, in Western Australia, which turns over $2.63 billion; Murray Goulburn Cooperative, which turns over $2.24 billion; Australian Unity, which turns over $656 million; Dairy Farmers Milk Cooperative, which turns over $497 million; and the NRMA, which turns over $456 million. Other notable cooperatives in Australia include Norco in my electorate, the RACV, RACQ, Credit Union Australia, and a range of credit unions including the Banana Coast Credit Union, or BCU as it is now known, in my electorate. I would also like to note the Macleay Regional Cooperative and the Coffs Harbour Fishermen's Cooperative. Both are located in my electorate and both are in the top 100 cooperatives in Australia. The Macleay Regional Cooperative has been operating in the Macleay Valley since 1905. It operates and owns the Kempsey Supa IGA supermarket, Macleay 5 Star Fitness and key commercial real estate in Kempsey. The Coffs Harbour Fishermen's Cooperative has been operating since the 1950s. It is owned by 45 local professional fisherman and is a significant part of Coffs Harbour's economy, providing significant local employment opportunities. The Nambucca River Cooperative also operates in my electorate. It started in 1903 and has served the Nambucca Valley ever since. In the north of my electorate is the Clarence River Fishermen's Cooperative, which is a very important part of the Maclean community. I should also mention Oz Berries in Woolgoolga. The blueberry industry has provided a significant boost to our region with hundreds of jobs and continuing investment in the area. The cooperative allows local farmers to focus on growing and picking berries while marketing and sales are left to the cooperative. Around the world, one billion people are cooperative members and cooperatives collectively employ 100 million people globally. The 300 largest cooperatives in the world are worth a combined value of US$1.6 trillion. Because cooperatives operate in the best interest of members, not shareholders, they are able to provide a range of services that may not be available from organisations with traditional company structures. You only have to look at the role that credit unions and building societies play in regional communities to realise the importance of cooperatives. Mutual banking institutions are accountable to their communities and can often be found serving regional communities long after the major banks have closed their branches and left town. Australian mutual banking institutions hold about $83 billion in assets and serve some 4.6 million Australians. Despite the significant size of the mutual sector, credit unions and building societies have the flexibility to meet the needs of their members because they do not answer to shareholders demanding ever-increasing profit growth. The International Year of the Cooperative secretariat explains the benefits of cooperatives by saying: Co-operatives’ democratic structure often allows for more prudent business decisions to be made. Not being tied to the merry-go-round of short-term profits means co-operatives can invest in their businesses and their people. Co-operatives have strong links to the communities in which they operate and in which their members live. As such they promote self-reliance of communities and are of general benefit to society. In short, cooperatives often serve a dual role as both business entities and social enterprises. For this reason, cooperatives are a significant contributor to many Australian communities and they should be recognised. Unfortunately cooperatives do not attract the same recognition or benefits as organisations with a company structure. In the past, cooperatives have missed out on some benefits available to companies. I have been advised by some cooperatives that the federal government's Enterprise Connect program will only provide advice to organisations with a company structure; likewise, some state government industry advice programs are only available to companies. A number of other government programs, including the Social Enterprise Development and Investment Fund, do not appear to include cooperatives as eligible to receive assistance. Cooperatives are also disadvantaged by the current accounting standards, which treat members' shares in a cooperative as a liability; in contrast, a shareholder's investment in a company is seen as equity. The difference may materially impact on a cooperative's ability to raise finance. Cooperatives have also struggled to manage the range of different state based regulatory regimes and laws. The states and territories are gradually moving towards nationally consistent cooperative laws but the process is taking some considerable time. I am pleased to note that New South Wales has recently passed new, nationally consistent cooperative laws. The law change will benefit around 680 cooperatives in New South Wales with a combined total of more than 1.5 million members. New South Wales is the lead jurisdiction for cooperative national law and it is now up to the other states and territories to get on board and pass similar laws. Once operating nationally, the new cooperatives national law will remove barriers and encourage growth in the cooperative sector. We need to have a seamless regulatory regime that does not punish cooperatives operating across state borders. I call on the states and territories to pass the new cooperative laws just as soon as possible. Cooperatives provide diversity and opportunity in the Australian economy. It is entirely appropriate that we recognise and celebrate the contribution made by cooperatives in Australia. I will conclude my remarks with a quote from UN Secretary-General Ban Ki-moon who said: Cooperatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility. I call on all members of this House to support this motion.

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