1301.0 - Year Book Australia, 2012  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 24/05/2012   
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International Year of Co-operatives


This section illustrates the diversity of activities to be found amongst Australian co-operatives. Other examples can be found as special articles in chapters 3 ABORIGINAL AND TORRES STRAIT ISLANDER PEOPLES, 10 HOUSING, 11 HEALTH, 17 FORESTRY AND FISHING and 27 FINANCIAL SYSTEM.

The diversity of activities of Australian co-operatives is illustrated by diagram 6.

6. Co-operative business activities in Australia(a)
(a) The activities are not necessarily mutually exclusive.

Source: Prepared by New South Wales Fair Trading.


Credit unions – an overview

This article was contributed by Dr Leanne Cutcher, School of Business, University of Sydney.

Credit unions, as financial co-operatives, are democratically run, member-owned organisations that redistribute profits back into the credit union. Credit union membership is based on a common bond, a linkage shared by savers and borrowers who belong to a specific community, organisation, religion or place of employment. Members may benefit from higher returns on savings, lower interest rates on loans and lower fees on accounts. Central to what is often called the ‘credit union difference’ is the concept of mutuality. The basic principle of mutuality is that a mutual’s members own the organisation. On joining a credit union, each member is asked to purchase a share for a nominal amount and this entitles them to an equal say in the running of the credit union. Members have the right to vote at AGMs and can also stand for positions on the Board. Each member has one vote, regardless of the volume of business they have with the credit union.

In line with credit unions around the world, Australian credit unions aim to operate under principles set down by the World Council of Credit Unions (WOCCU). These principles include:
  • open and voluntary membership to all within the group accepted by the credit union
  • democratic control
  • non-discrimination
  • service to members
  • equitable distribution of surpluses
  • financial stability
  • ongoing education to promote thrift and wise use of credit, and
  • social responsibility.

In 2010, there were 52,945 credit unions in 100 countries operating under the auspices of the World Council of Credit Unions (WOCCU, 2012).

In Australia, up until the 1980s, credit unions were subject to their own legislative requirements and were afforded tax incentives. These advantages helped sustain a large number of credit unions, which serviced discrete memberships. However, several structural changes, most notably deregulation of the financial services sector, have meant that some smaller credit unions have merged in order to be able to meet the increased reporting requirements while still maintaining high levels of service to their members. The result of these changes has been a raft of amalgamations which saw credit union numbers fall from 549 in 1983 (Lewis, 2001) to 104 in 2011 (APRA, 2011).

Credit unions continue to be an important part of the Australian financial landscape, with over 4 million members. While some have adopted similar strategies to the large retail banks, others continue to be locally focused, or maintain a strong industrial bond. One example of this diversity is reflected in the adoption of a ‘Mutual Banking Code of Practice’ by Abacus, the industry association for mutual credit unions and building societies, in July 2009. While it is a code of practice for ‘Mutuals’, there is no discussion of the meaning of mutuality in the document, nor mention of the philosophy of co-operation that is said to underpin the work of mutuals.

Some credit unions in Australia have maintained a strong commitment to the principles of mutuality and co-operation, mainly because they are aimed at servicing particular communities. Examples include: Traditional Credit Union, servicing Aboriginal and Torres Strait Islander people in the Northern Territory; Fitzroy and Carlton Community Credit Co-operative, servicing low-income individuals; and Wyong Council Credit Union, servicing a particular group of employees. These organisations are formed around strong bonds of association and this drives their practices, including an emphasis on educating members in financial literacy.

The role of credit unions in the South East Asia-Pacific Region

This article was contributed by Catherine Drummond, Credit Union Foundation Australia (CUFA).<Endnote 1>

There is an emerging credit union movement across the South East Asia-Pacific Region, operating both formally and informally in rural and remote areas. Credit unions can provide poor communities with access to financial services, a better level of financial literacy, encouragement to save and low interest loans. Without the presence of credit unions and other financial co-operatives, people from poor areas may save their money by hiding it or by investing in gold or livestock. They can also succumb to the debt cycle of money lenders who often take advantage of their inability to access loans and short-term capital from other means.

Credit unions and financial co-operatives offer poor communities a safe place to save and provide them with a means of budgeting. The amassed savings of members form a low-cost loan pool for all members to access. The ability to save reduces the need for short-term loans by providing money for a rainy day, for instance, for an unexpected medical emergency or daily family expenses in the event of crop failure. Members of credit unions and financial co-operatives from rural and remote locations may not have birth certificates for identification purposes or regular payslips for proof of income. They are therefore more likely to be precluded from accessing the services of commercial banks, which may also be geographically inaccessible.

Members of credit unions and financial co-operatives may be able to access loans to assist them to establish or extend micro-businesses. Examples of business activities are vegetable growing, animal-raising, setting up grocery stalls, mechanical repair businesses and sewing machining. Extra income from these activities can allow the poor to better feed their families, give children an opportunity to go to school rather than have to work to earn money, and ensure proper medical care in times of sickness.

Lanamona Credit Union in Timor Leste (East Timor) is one of many credit unions or financial co-operatives for which CUFA provides support. Lanamona was formed in 2008 by five women in Maliana, a rural district close to the Indonesian border. They each contributed $5.00 and formed a savings club to help their community rebuild after conflict. At time of writing, Lanamona’s membership exceeded 600 and they had raised sufficient institutional capital to pay two staff members, after operating on a voluntary basis until early 2011.

Image: Lanamona Credit Union in Timor Leste.

Examples of financial co-operatives

Information for this section was provided by bankmecu, the Fitzroy and Carlton Community Credit Co-operative and the Community Mutual Group.

mecu Limited was approved to call itself a bank from 1 September 2011 under the new trading name of bankmecu. The bank was Australia’s first customer-owned bank, being wholly owned by, and accountable to, its customers.

bankmecu was the first co-operative in the world to become a signatory to the United Nations Environment Program Finance Initiative and is recognised for its sustainability reporting. bankmecu achieved carbon neutrality on 1 July 2011 with a 640 hectare ‘Landbank’, which offsets emissions from car loans finances, biodiversity lost from home construction and carbon emissions from business operations.

The Fitzroy and Carlton Community Credit Co-operative is a credit union that offers banking services to members on low and fixed incomes. It is an established provider of suitable and situation-sensitive financial products and services to financially excluded members of the community. The Co-operative was founded in 1977 by the Action Resource Centre Project of the Brotherhood of St Laurence, to assist members to gain the skills necessary to manage their own finances with access to small loans, budgeting advice and a budget service, special savings accounts and services aimed at avoiding problematic debt.

Around 80% of its members receive Centrelink payments. There are no fees for over-the-counter transactions and the credit union provides interest-free emergency loans and a budgeting and bill-paying service.

The majority of tellers are volunteers on low and fixed incomes. Some use their training and work experience to later gain full-time employment.

The Community Mutual Group is based in northern NSW and is the largest inland community Credit Union in Australia, with a member base of approximately 70,000.

In January 2010, the Community Mutual Group combined three regional credit union brands to form a single, regionally-based financial institution. It has consequently achieved cost savings and extended the provision of products and services.

The Group retains local decision-making and community involvement and reinvests its profits for the social, economic and environmental wealth of members and non-members.

To celebrate the International Year of Co-operatives in 2012, CMG is engaging with 280 schools on the topic 'What Makes a Credit Union Different?' It will invite more than 160 co-operatives in its region to profile their services and contributions to local communities and to highlight possible career paths for young people in the co-operative movement.


Agricultural co-operatives

This article was contributed by Co-operatives Australia, with additional information provided by Co-operative Bulk Handling, Murray Goulburn Co-operative and Norco Co-operative.

Australia's largest co-operatives (by turnover) are both in the agricultural sector. They are Co-operative Bulk Handling Ltd (CBH) and Murray Goulburn Co-operative Co Ltd (Co-operatives Australia, 2011).

Established in 1933, CBH Group is Australia’s biggest co-operative (by turnover) and has grown through innovation with operations including grain storage, handling, transport, marketing, shipping, and domestic and off-shore processing. Based in Western Australia and owned and controlled by around 4,500 grain growers, CBH’s core role is to create and return value to members, principally by lower fees for grain storage, handling and freight, and investment in the upgrade and maintenance of storage and handling infrastructure. In the process, it supports many rural and regional communities.

In January 2011, the CBH Board announced the outcome of a year-long investigation into the best structure for CBH. The Board and members voted overwhelmingly in support of remaining a co-operative with a modernised structure and constitution that would enable CBH to return value to growers in the ways they value most.

Murray Goulburn Co-operative Co Ltd, established in 1950, is a supplier of dairy ingredients and retail products, processing over a third of Australia's milk supply. Based in Victoria, Murray Goulburn has 2,580 dairy farmer owners. The Co-operative exports to major markets around the world and has a strong presence in the Australian domestic market.

Another large agricultural co-operative is Norco Co-operative Limited. Norco is a dairy-based co-operative that has been in business since 1895, when The North Coast Fresh Food & Cold Storage Co-operative Company Ltd began operations on 5 June 1895. Norco is still owned by its nearly 300 shareholders who operate Australian dairy farms and supply milk to the Co-operative to be sold into the fresh milk market. Surplus milk is utilised and value added by the Co-operative.

In addition to the dairy-based operations in Lismore, Norco has a network of rural stores in Northern New South Wales and South East Queensland and an Agribusiness division.

Co-operatives of the Riverina region

2012 is the International Year of Co-operatives as well as the Australian Year of the Farmer. To celebrate both Years, it is fitting to include a section in this feature article on the Riverina region of New South Wales. The region includes two major irrigation areas – the Murrumbidgee Irrigation Area (MIA) and the Coleambally Irrigation Area (CIA) – and has a number of agricultural and other co-operatives.

The MIA encompasses that part of New South Wales from Narrandera in the south-east to Goolgowi in the north-west. Its major towns are Griffith and Leeton. The New South Wales Government developed the MIA from the early 1900s through to the 1930s <Endnote 2> in a large civil engineering project that included the construction of the Burrinjuck Dam and an elaborate irrigation network of canals and channels. As a result, the area has become an intensive fruit, wine grape and rice-growing region.

The history of the MIA encompasses the history of a number of important co-operatives in Australia. One of the largest co-operatives was the Ricegrowers’ Co-operative Limited (RCL), formed in 1985 from two other earlier co-operatives, the 1925 Murrumbidgee Irrigation Rice Growers’ Co-operative Society and the 1950 Ricegrowers Co-operative Mills Ltd. In the face of global oversupply and low prices, RCL moved into the manufacture of a range of new products from rice and its by-products. In 2005, rice grower members voted to convert RCL from a co-operative to a company, Ricegrowers Limited.<Endnote 3>

The original cannery which formed Letona was built in 1914 by the New South Wales Government as part of the Murrumbidgee Irrigation Project. The Letona Co-operative Cannery Ltd was formed in 1935 by the Australian Canning Fruitgrowers Association and other fruit growers in the area. The Co-operative modernised and expanded the plant, subsuming the Mountain Maid cannery in Batlow in 1977, despite an oversupply of canned fruit in markets overseas. The financial position of the cannery ultimately deteriorated and Letona ceased operation in 1994.<Endnote 4>

Co-operatives with a regional rather than an activity focus have also developed in the Riverina. An example is the Yenda Producers Co-operative Society Ltd. Incorporated in 1925, with 10 shareholders, it has grown and diversified to now have over 1,500 shareholders and a number of full-time and casual employees. It provides a large range of agronomy services and agricultural products, and assists in the transport and marketing of many of the region’s outputs. Apart from services to the farming community, ‘Yenda Prods’ contributes to local charities and associations, as well as providing local employment.

As well as agricultural co-operatives, the MIA also saw a number of credit unions form in the area. The Murrumbidgee Mutual Credit Union was set up over 40 years ago. In 1988, it merged with the Agristaff Credit Union, formed to service employees and families of the New South Wales Department of Agriculture, with a head office in Sydney and regional offices in Griffith and Leeton. With the relocation of the Department of Agriculture to Orange, the Sydney office was closed and the Credit Union focused on the MIA. It changed its name to the Country First Credit Union Ltd and has offices in Griffith, Leeton, Narrandera and an agency in Hay. <Endnote 5>

The Coleambally Irrigation Area (CIA) was established between 1958 and 1970. It is located south of Griffith between Darlington Point and Jerilderie, and comprises 477 irrigation farms and 35,000 hectares of irrigated land supplied through open earthen channels. The Coleambally Irrigation Co-operative Limited (CICL) commenced in 2000 as an irrigator-owned and operated enterprise and holds the Coleambally Irrigation District Irrigation water licence, providing water and associated services to customers.<Endnote 6> The supply system is gravity fed and incorporates solar-powered metering and flow regulation technologies. The Co-operative also manages 1,700 hectares of Crown land that has been set aside for biodiversity purposes.<Endnote 7>

CICL has established a separate entity known as the Coleambally Irrigation Mutual Co-operative Limited for the purpose of investing asset funds for future replacement of the irrigation infrastructure.

Automotive – Capricorn Society Limited

This article was contributed by Capricorn Society.

Capricorn Society is one of the largest automotive parts buying groups in the southern hemisphere. It provides its automotive industry members, who are also its owners, with access to suppliers, consolidated billing, credit and financial services and insurance. Members are entitled to an equal say and one vote, regardless of the number of shares held.

Other member services offered by subsidiary divisions of the company are motor vehicle and equipment finance, business protection, travel services, training and education.

Capricorn Society was established in 1975 by a small group of Western Australian service station owners to increase their buying power to compete with the big multinational oil companies. Capricorn has grown to more than 14,000 members in Australia, New Zealand and the Republic of South Africa and works with over 2,200 suppliers across the three zones.

Trade supplies – Plumbers’ Supplies Co-operative Limited

This article was contributed by Plumbers’ Supplies Co-operative.

Members of the Master Plumbers Association formed Plumbers' Supplies Co-operative in 1955 to alleviate problems associated with post-war material shortages and the fact that plumbers were unable to obtain traders' price discounts.

Owned by the plumber members by way of shareholdings, the Co-operative helps maintain market prices at profitable levels to members. Plumbers’ Supplies has grown from an original 41 shareholders and one warehouse to a membership exceeding 4,000 and a network of over 30 branches.

Plumbers’ Supplies returns all profits to members by way of annual rebates and dividends.

Consumer and retail – The Terang and District Co-operative

This article was contributed by Terang and District Co-operative.

The Terang and District Co-operative is a 103-year old trading co-operative serving its local community in times of declining populations in regional centres. It is owned and controlled by its members who use its services – a supermarket, rural store, farm services and hardware store. In 2011, it had more than 1,850 members. It is governed by the Victorian Co-operatives Act 1996.

Child care – Community Child Care Co-operative (NSW)

This article was contributed by Community Child Care Co-operative.

Community Child Care Co-operative (NSW) was established in 1978 and is a not-for-profit organisation representing over 1,500 children’s services, families and individuals.

Its aim is to inform and inspire early education and care services, and influence government policy, practices and programs so that children in New South Wales have access to quality children’s services that meet the needs of their communities.

The Co-operative advocates for the provision of accessible, affordable and high quality services for children and their families in NSW. It delivers professional development and support for all children’s services in NSW and works to assist service providers to provide high quality early education and care.

Community Child Care Co-operative is funded by the NSW State and Commonwealth governments in addition to earning income through membership and sale of resources.

Renewable energy – Hepburn Community Wind Park Co-operative

This article was contributed by Hepburn Community Wind Park Co-operative.

The Hepburn Community Wind Park Co-operative (Hepburn Wind) comprises two turbines with a combined capacity of 4.1 MW, expected to produce enough electricity to power 2,300 homes. Turbines were ordered in December 2009 and began generating power in June 2011.

The local community owns the wind farm and the Co-operative manages the wind park. It provides financial returns to its members and funds community projects through a community sustainability fund.

More than 1,900 co-operative members contributed over $9 million for construction of the wind farm – a new way of funding and developing wind energy resources through direct investment from small investors and local communities who want to support local renewable energy.

Image: Hepburn wind tower.

Organic food – Alfalfa House

This article was contributed by Alfalfa House.

Alfalfa House is a community-based not-for-profit food co-operative in Enmore, NSW. It grew out of a rent strike by a single household in the nearby suburb of Erskineville in 1981. Wholesale bulk grains, cereals, nuts and seeds were purchased from the retained rent monies and sold from the front room of the house. In 1983, the group moved to the Alpha House building on King Street, Newtown and was renamed The Community Food Store.

Alfalfa House was officially registered as a co-operative on December 23 1988. It has since grown to around 3,000 members but remains committed to its original aims. Most of the stock is sold in bulk and unpackaged, thus reducing landfill waste; some is bought directly from farmers and producers. The 'co-op' checks with growers and suppliers to ensure that products meet ethical and environmental standards.

Profits are returned to the members in the form of better services and cheaper goods. All members are entitled to a 10% discount every time they shop, with a 25% discount available to those who also volunteer.

Image: Community-based not-for-profit food co-operative Alfalfa House, Enmore, NSW.

State and regional profile – NSW Mid North Coast Region

This article was contributed by Todd Green of Regional Development Australia Mid North Coast.

The New South Wales Mid North Coast region has a rich history of co-operatives – with three dating back to the early 1900s still running successful operations and providing community benefit.

These co-operatives commenced operations with an agricultural focus, predominantly dairy related, and have adapted their operations over time to remain viable and continue to offer benefits to their members and the broader community.

The Hastings Co-operative commenced in 1916, Macleay Regional Co-operative in 1905 and Nambucca River Co-operative in 1903.

Of the co-operatives operating in the Mid North Coast region, five form part of the Top 100 list of co-operatives by annual turnover (Co-operatives Australia, 2011). These are Hastings Co-operative, Bananacoast Community Credit Union, Holiday Coast Credit Union, Macleay Regional Co-operative Ltd and Coffs Harbour Fisherman’s Co-operative.

In addition to the long history of co-operatives on the NSW Mid North Coast, there remains a strong presence today with three credit unions and 38 co-operatives registered.

The co-operatives operating in the Mid North Coast region cover a wide range of products and services, providing economic, social and environmental benefits. The co-operatives cover activities as diverse as community radio, housing, education, agriculture, taxis, recreational clubs, fish wholesaling, supermarkets, service stations, native bush regeneration, property development, respite accommodation services, and women’s and children’s refuges.

  1. Credit Union Foundation Australia (CUFA) is the development agency for the Australian Credit Union Movement. CUFA develops community access to affordable financial services in the Asia-Pacific region, working co-operatively at grass roots through to government levels. It helps build capacity in emerging credit union movements to create sustainability, improve lives and help to alleviate poverty. <Back>
  2. NSW Agriculture 2003, Murrumbidgee Catchment Irrigation Profile. <Back>
  3. Detailed_History_of_the_Australian_Rice_Industry. <Back>
  4. Letona Co-operative Cannery Ltd (1935–1994). <Back>
  5. Country First Credit Union history. <Back>
  6. Coleambally Irrigation history. <Back>
  7. Coleambally Irrigation. <Back>


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Statistics contained in the Year Book are the most recent available at the time of preparation. In many cases, the ABS website and the websites of other organisations provide access to more recent data. Each Year Book table or graph and the bibliography at the end of each chapter provides hyperlinks to the most up to date data release where available.