Prospects for co-ops in Australia

The Co-operative Revolution – can it happen in Australia?

A version of this article first appeared in the Coffs Coast Advocate on Saturday, 24th November, 2012

The National Co-operatives conference, held in Port Macquarie at the end of October, had two goals: to celebrate the successes of co-operatives in Australia, and internationally; and to identify opportunities for the sector to strengthen and expand.

A centrepiece of the conference was the release of new research mapping the extent of the co-operative sector in Australia by the Australia Institute. This research revealed that while most Australians (79%) are members of at least one co-operative or mutual financial institution – are you a member of the NRMA, for example? –  a small minority (16%) were aware of that fact. The report’s authors suggested that this low level of awareness of co-operatives – amongst both their own members, and the public generally – could be due to the fact that, unlike corporations, co-operatives spend relatively little on advertising and promoting themselves.

The take-out message was one of opportunity for the sector. Because co-operatives don’t have large advertising budgets, they deliver good value for money to their members; the report stated that an average mortgage with a building society or credit union, for example, costs around $75,000 less over the life of the loan than if it was taken out with a commercial bank. The challenge, it seems, lies mainly in better communicating the benefits of belonging to a co-operative.

From the Port Macquarie Co-op conference
From the Port Macquarie Co-op conference

Yet more is at stake than just brushing up marketing strategies. In my previous column I described the extraordinary revival of the co-operative movement in the UK, and how this had been built on a long process of internal reflection and a return to the basic core values of the movement.

This process of critical self-reflection is desperately needed in the co-operative movement in Australia. In his 2006 book, The Democracy Principle,  co-operative historian Gary Lewis (who was not present at Port Macquarie, unfortunately), delivered a scathing assessment of the many and continual failures of agricultural co-operatives to build a strong, cohesive, visionary and above all principled co-operative movement in this country.

While Lewis identified a strong confluence of external factors – geographical distance, parochialism and states rights, epochal shifts in global trade, ideological opponents, and a lack of supportive political leadership at the federal level, amongst others – it was the factors internal to individual co-operatives, and the movement as a whole, that have probably done most to stifle its potential. These internal factors include:

  • A marked preference for competition over co-operation – a failure of co-operatives to co-operate with each other
  • A first allegiance to commercial industries, and industry associations, rather than to the co-operative movement
  • A failure to invest in co-operative research and development, and co-operative extension services
  • A failure to invest in co-operative education, and thus a failure to capture the imagination of younger generations
  • A failure to invest in building umbrella institutions, and effective policy advocacy at the federal government level
  • The inability to establish a co-operative bank to finance co-operative ventures – a sine qua non of a vibrant ‘self-help’ movement

Cumulatively and collectively, these failures reflected ‘a triumph of the pragmatists over the idealists’, as well as the pursuit of ‘market share, competitiveness and growth for growth’s sake’, thus resulting in a ‘degrading of co-operative consciousness’ and ultimately a ‘short-sighted and stingy movement’.

In Port Macquarie, the process of critical reflection was beginning, albeit slowly. There was clear recognition of the need for a national council to advocate for the sector’s needs, and a commitment to bring this into existence was the conference’s most concrete outcome.

Achieving such an outcome will be testament to the extent to which the sector can truly ‘co-operate’. But the most exciting proposals came out of the the Youth Summit , where 30 delegates spent 2.5 hours engaged in asset mapping, brainstorming and dotmocracy to agree on a series of strategic initiatives to raise awareness of co-operatives amongst young people, and begin building a co-operative consciousness and sense of a movement. The brainstormed initiatives include a national road-trip, a youth festival, and getting co-operatives on the curricula of university business courses.

Co-operatives have a strong story to tell: Norco’s recent announcement of its $5.7 million profit for 2012, in difficult market conditions, is just one success among many. But the potential of the movement to be a powerful force for decent employment and strong economic development, in turbulent economic times, is yet to be realised in this country.