Andrew Leigh

Labor’s reforms to promote inclusive ownership and inclusive growth, Business Insider,       18 November 2016

In history’s page not much is recorded about events in the Scottish village of Fenwick, except in 1769 – when some members of the Fenwick Weavers Society, so their story goes, lugged “victuals” they’d purchased with Society funds to the front room of a small cottage.

From here the items were sold at a discount to fellow Society members while the profits went into the Society’s funds (deposited – literally – in a box).

This small community enterprise appears to be the first consumer cooperative of which there are records, while the fund the Society established to lend money for members to “purchase high cost items” seems very much like a primitive credit union.

However, equally important as these profit-orientated activities was the motivation of the Society’s members and their objectives.

They used the Society’s profits to establish a library in the village, build a schoolhouse and even sponsored a visit from American anti-slavery campaigner Frederick Douglass to give a lecture about his experiences.

It is these activities, dedicated to supporting and improving the lives of the Society’s members and by extension the community in which they lived that I believe define the value of cooperative and mutual enterprises.

This is why – in my role as Labor’s first-ever Shadow Minister for Charities and Not-For-Profits – I was delighted to announce Labor’s reforms to Australia’s cooperative and mutuals sector at the recent Business Council of Cooperatives and Mutuals 2016 Leaders’ Summit.

This suite of measures will encourage the growth of cooperative and mutual enterprises and provide the necessary boost for much-needed competition in the banking sector.

It is natural for the Labor Party to take the lead on cooperatives.

Our party has a strong history of standing up for policies that allow employees to share in the success of their employer. Labor’s reforms will promote ethical competition and productivity, as well as encouraging social investment and workplace democracy.

In particular, Labor’s proposals will facilitate fairer access to capital, allowing credit unions and building societies to compete effectively with large banks, clearly define mutual enterprises and director’s duties in the Corporations Act, and remove regulations that the sector feels are unnecessary or duplicative.

We are also committing to removing the arbitrary rule that only organisations incorporated under Commonwealth legislation can receive grants worth $500,000 or more.

This threshold forces many cooperatives into an ill-fitting and unnecessary company structure, particularly Indigenous enterprises seeking grants under the Indigenous Advancement Strategy.

Earlier this year, a Senate Committee, ably chaired by Chris Ketter, pointed out that co-operative and mutual enterprises are no more risky than incorporated organisations. That’s why Labor is urging the Government to change the rules so cooperatives can compete for grants.

While the cooperative model established by the Fenwick weavers more than 250 years ago has thrived, handweaving as an industry did not, and the last three members of the Fenwick Weavers Society wound the enterprise up in 1873.

But their pioneering efforts have been replicated all over the world – in the United States where food cooperatives have as many as 49,000 members, in Europe where renewable energy cooperatives operate wind turbines an alternative to nuclear and fossil energy, and in Australia.

The Business Council of Cooperatives and Mutuals estimates that there are 2000 cooperatives around Australia working for a combined 14.8 million memberships, members who are also owners of the business rather than shareholders.

Enterprises like the National Health Cooperative in the Australian Capital Territory, Norco Co-operative Limited in New South Wales, the Co-op Heart of the Barossa store in South Australia, Co-operatives Western Australia, Maple Street Co-operative in the town of Maleny, Queensland and indigenous cooperatives across the Northern Territory are all helping put economic and decision-making power in the hands of the people those decisions affect.

Labor supports all of those members. Our reforms will enable businesses, communities and workers to cooperate – raising productivity, boosting equity, and fostering ethical competition across society.

Andrew Leigh is the Shadow Assistant Treasurer and the Shadow Minister for Charities and Not-for-Profits. This Opinion Piece was first published by Business Insider on Friday, 18 November 2016