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Co-operative Federation of Victoria Ltd
1993-1999

INTRODUCTION

The Co-operative Federation of Victoria is the peak body for co-operatives in the Australian state of Victoria. It is a not-for-profit co-operative registered as a federation under the Victorian Co-operatives Act 1996, and is an expression of the 6th international co-operative principle -

Co-operation between co-operatives

Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.

The 1990's were the golden years of the Co-operative Federation of Victoria. From its revival in 1993 to its restructure in 1999, the federation was an active and effective organisation that achieved many positive outcomes for its member co-operatives and Victorian co-operatives generally. In summary, the significant achievements between 1993 and 1999 include -

  • Building the federation into a financially healthy organisation with a growing membership and broad range of member services.
  • Developing a number of co-operative education and training initiatives.
  • Continuing the good relations with Victorian state parliamentarians developed by the Australian Association of Co-operatives, resulting in positive responses and actions from government ministers to co-operative issues raised by the federation.
  • Concluding the development of the Victorian Co-operatives Act 1996, which was adopted by other states and territories as the model act for consistent co-operatives legislation around Australia.
  • Contributing to the Co-operatives Council of Australia's achievements in the areas of nationally consistent co-operatives legislation and retaining existing co-operative taxation measures following a 1999 federal review of business taxation.

The following information has been sourced from the federation's annual reports, newsletter, diary notes and recollections of former secretary Tony Gill.

BACKGROUND

The Co-operative Federation of Victoria was formed in 1970 by co-operatives to present a united voice to the Victorian government, facilitate education and training, and foster the development of co-operatives in the state.

After a period of decline during the 1980's, the federation board resolved in 1987 to suspend operations and encouraged its members to join the Australian Association of Co-operatives Ltd (AAC), a new national body based in New South Wales. Nearly half of the federation's 55 members responded, enabling the Victorian Division of AAC to be established in 1988.

On 4 March 1993, AAC was placed in voluntary liquidation following problems associated with its banking service in NSW (the service was not available to Victorian co-operatives). The outcome of this sudden event was that Victorian co-operatives no longer had an active industry body to represent their interests to the Victorian government, resulting in a deferral of crucial negotiations on new co-operatives legislation. Also, most of the member services provided by AAC were withdrawn, including the termination of the employment of AAC's Victorian Executive Officer, Tony Gill.

In May 1993, the former chairman of AAC's Victorian Division, John Gill (no relation to Tony), convened a Future Directions Forum for Victorian co-operatives. The forum identified the important need for a body to represent co-operatives to the Victorian government, particularily on co-operatives legislation, and to develop co-oerative education and training initiatives.

After meeting a group appointed by the forum, the federation board reactivated the co-operative by filling vacancies on the board, appointing Tony Gill as the federation's secretary, and inviting dormant members to reactivate their membership. Fourteen members responded to the invitation.

On 1 July 1993, the federation recommenced operations. The priorities of the board were to -

  • Develop a mission statement and objectives.
  • Establish a system of governance that efficiently used the scarce resources of the federation.
  • Approve a budget and financial controls.
  • Increase the number and type of members.
  • Obtain recognition from the Victorian government that the federation was the body representing co-operatives in the state.
  • Resume negotiations with the Victorian government on reforming co-operatives legislation.
MISSION

To develop and promote the co-operative movement as a means of satisfying the economic and social needs of people.

OBJECTIVES
  1. Help improve the performance of member co-operatives in the provision of services to their members.
  2. Make representations to government on legislation and policies to facilitate the development of co-operatives.
  3. Promote co-operatives to the public.
  4. Facilitate and promote the formation of co-operatives.
  5. Educate co-operative members and the community at large in co-operative principles and practices.
  6. Facilitate co-operation between co-operatives.
GOVERNANCE

Board of directors

Between 1993 and 1999, the federation was governed by a board of 10 directors elected from among delegates of member co-operatives. The composition of the board reflected the diversity of the membership and included, for the first time, a number of women directors.

In 1993, the board recognised that to build the federation into an effective organisation, it needed to have a paid secretary to manage the day-to-day operations of the federation. With just over $6,000 in the bank at 1 July 1993, the board adopted a contemporary corporate governance model to manage the business of the federation on behalf of members.

The board took responsibility for the traditional governance roles of accountability, policy formulation, setting strategic direction and monitoring performance, while outsourcing the corporate secretarial, bookkeeping, administrative and member relations functions. (At the time, three of the four other state co-operative federations had a similar governance system.)

Secretary

In July 1993, the board engaged former AAC Victorian Executive Officer, Tony Gill, as a consultant on a task specific contract (for an average of 8 hours per week) to establish the administrative and financial systems of the federation and to undertake the following functions -

  • Act as secretary of the federation.
  • Provide the federation's registered office.
  • Provide corporate secretarial services.
  • Perform specified administrative tasks.
  • Organise and attend board and general meetings.
  • Liaise with members.
  • Develop and manage member services
  • Financial management.
  • Represent the federation with the State Government.
  • Publish the Victorian Co-operative News.

Tony also performed other work listed below for the federation on a consultancy basis.

MEMBERSHIP

The owners of the federation are registered co-operatives and co-operative companies located in the Australian state of Victoria. Membership of the federation is voluntary and open to all Victorian co-operatives. Members are required to purchase five shares upon joining the federation, and pay a yearly subscription based on their annual turnover to remain an active member.

When re-activated in July 1993, the federation had 55 co-operatives listed in its register of members. Nearly half of the members, however, had either ceased trading or been dissolved over the previous 6 years. Initially, only 14 members responded to the invitation to become financial members.

The two main priorities for Tony Gill were to increase the number of members to fund the day-to-day operations of the federation and to broaden its membership to include most kinds of co-operatives.

The latter priority was crucial to the federation's status with the Victorian Government, as the federation was required to justify that it represented most kinds of co-operatives in the state before the government would negotiate on co-operatives legislation. (The federation lost its status as the Victorian peak co-operative body with the government in 1987.)

During the 1993/94 financial year, Tony Gill recruited 20 new members which, together with the 14 initial members, raised over $28,000 in subscriptions for the year. The federation also broadened its membership to include aboriginal, agricultural, business services, child care, clubs, fishing, housing, health and retail co-operatives. This enabled the federation to achieve its goal in 1994 of being recognised by the Victorian Government as the peak body representing co-operatives in the state.

In June 1996, the board introduced a commission on subscriptions earned from new members to defray the secretary's costs in attending recruitment meetings with prospective members. Previously, Tony Gill paid travel and accommodation expenses out of his own pocket, with no reimbursement from the federation. The incentive proved to be a success, with the federation earning an additional $13,715 in annual subscription income from 48 new members recruited between 1 July 1996 and 30 September 1999. Among the new members were broadcasting, forestry, taxi and water supply co-operatives.

At 30 September 1999, the federation had a record 84 financial members covering a diverse range of industries and activities.

MEMBER SERVICES

The experience of the Australian Association of Co-operatives in Victoria demonstrated that the recruitment and retention of members depended, in large part, on providing timely services relevant to their needs.

Between 1993 and 1999, the federation formed strategic alliances with co-operatives, educational institutions and a number of organisations and businesses to provide services to member co-operatives -

  • ALD Communications - Telephone Savings Scheme.
  • Asia Pacific Co-operative Training Centre Ltd - Director training.
  • Community Enterprise Network Co-operative Ltd - Financial and business services.
  • Co-operative Purchasing Services Ltd - Purchasing goods and services.
  • Corrs Chambers Westgarth - Legislation information sheets and legal advice.
  • Monash University - Agricultural co-operative director training.
  • National Tax Agents Association - Taxation advice.
  • Stone and Partners - Ex-directors protection package.
  • Substitution Pty Ltd - Media services and discounted subscription to National Co-op Update.
  • UK Plunkett Foundation - Australian/New Zealand agent for co-operative publications.
  • Wickett Insurance Broking - Insurances.
In addition, the federation provided the following 'in-house' services -
  • Co-operative education - newsletter, brochures and seminars.
  • 24/7 telephone hotline - information and problem solving service.
  • Representations to the Victorian Government on member concerns.
  • Promoting member's services to other members and the public.
  • Victorian agent for interstate co-operatives.
  • Forms and registers required by the Co-operatives Act.

Not only were most services utilised by members, some produced income for the federation.

FINANCIAL PERFORMANCE

During the period 1993 to 1999, the federation had three main sources of income - annual subscriptions from members, income from services, and periodic grants from the Victorian government and other sources. Income from members and services funded the operating expenses of the federation, while grants were used for specific projects, e.g., development of the Victorian Co-operatives Act and co-operative education and training initiatives.

When the federation was revived in 1993, it's only asset was $6,174 in the bank. Over the next 6 years, growing revenue from member subscriptions and services and prudent expenditure of grant income resulted in the federation having over $38,000 in the bank and net assets of $28,643 at 30 June 1999. The federation's financial position was further strengthened by $7,090 in subscription income received from 8 new members recruited by Tony Gill from 1 July to the end of his contract on 30 September 1999.

GOVERNMENT RELATIONS

A key objective of the federation is to make representations to government on legislation and policies to facilitate the development of co-operatives.

Co-operatives have long been recognised and supported by all Victorian political parties and state governments. This support was reaffirmed during the debate in the Victorian parliament on new co-operatives legislation in 1996.

From 1989 to 1993, the Victorian Division of the Australian Association of Co-operatives (AAC) developed good relations with a number of Victorian parliamentarians including relevant government and shadow ministers, as well as the Registrar of Co-operatives, Small Business Development Corporation and other government agencies.

The federation capitalised on the goodwill and contacts developed by former AAC Victorian Executive Officer, Tony Gill, to achieve recognition as the peak co-operative body in Victoria in 1994 and conclude the reform of Victoria's co-operatives legislation which began in 1988.

In addition to its achievement on co-operatives legislation, the federation was active in pursuing other public policy issues affecting Victorian co-operatives. It made a number of submissions to state and federal government inquires and reviews of legislation, made representations to various Victorian government ministers on co-operative issues, and invited state and federal politicians and senior bureaucrats to address annual general meetings and seminars.

Nationally, the federation was an active member of the Co-operatives Council of Australia, and contributed to the council's public policy achievements between 1994 and 1999.

CO-OPERATIVES COUNCIL OF AUSTRALIA

Following the closure of the Australian Association of Co-operatives in March 1993, Australia was without an active national body for co-operatives.

In May 1993, a National Co-operatives Congress was held in Sydney to discuss the future of the Australian co-operative sector. The congress resolved to establish an interim body called the National Co-operative Council, comprising the 5 state co-operative federations, the Asia Pacific Co-operative Training Centre Ltd and the Australian Co-operative Development League Ltd, to recommend a final structure for a national co-operative organisation.

In 1996, the Co-operative Federation of Australia was revived and renamed the Co-operatives Council of Australia. The members of the council were the 5 state co-operative federations, with each federation having one representative on the 5 person governing committee. Between 1994 and 1999, the Co-operative Federation of Victoria was represented on the committee by secretary Tony Gill.

During the period, the council had some major achievements -

  • Successfully lobbied for the defeat in the Australian Senate of a federal government bill to repeal an important tax benefit for agricultural co-operatives, 1996.
  • Established a regular dialogue with state and territory co-operative registrars.
  • Achieved state, territory and commonwealth governments' support for nationally consistent co-operatives legislation, 1996.
  • Organised a national policy conference, Canberra, 1998.
  • Prepared two submissions to the Ralph Review of Business Taxation and lobbied federal politicians and senior bureaucrats, resulting in the retention of Division 9 of the Income Tax Assessment Act, 1999.
ACHIEVEMENT of OBJECTIVES
The following is a list of activities undertaken by the federation between July 1993 and September 1999 to achieve its objectives.
OBJECTIVE 1
Help improve the performance of member co-operatives in the provision of services to their members.
  • Developed a broad range of member services.
  • Published a series of articles in the Victorian Co-operative News, on the role of the board of directors, 1995.
  • Convened a meeting between the Australian Stock Exchange and large Victorian agricultural co-operatives to discuss capital raising options, 1997.
  • Produced 15 Information Sheets on various provisions of the Co-operatives Act, 1998.
  • Initiated the annual Agribusiness Co-operative Directors seminar, in collaboration with Monash University, 1998
  • Assisted 50 federation members update their rules to comply with the new Victorian Co-operatives Act, 1998-99.
  • Organised the following seminars and workshops -
    • Co-operative Director Seminar of Not-for-Profit Co-operatives, Melbourne, 1995.
    • Seven consultation seminars on a new co-operatives act for co-operatives in regional Victoria and Melbourne, 1995.
    • Developing Best Practice for Agricultural Co-operatives seminar, 1996.
    • Four information seminars on the new Co-operatives Act for co-operatives in regional Victoria and Melbourne, 1996.
    • Co-operative Directors Workshop, Melbourne, 1999.
OBJECTIVE 2
Make representations to government on legislation and policies to facilitate the development of co-operatives.

       National legislation

  • Supported the Co-operatives Council of Australia in lobbying for the successful defeat in the Australian Senate of a federal government bill to repeal a tax concession for agricultural co-operatives, 1996.
  • Review of the Dentists Act and Dental Technicians Act, 1998.
  • Assisted the Co-operatives Council of Australia in researching and preparing its submissions to the Ralph Review of Business Taxation, 1999.

       State legislation

  • Review of the NSW Co-operatives Act, 1994.
  • Development of the Victorian Co-operatives Act, 1994-96.
  • Review of the NSW Co-operatives (Interstate Recognition) Bill, 1995.
  • Review of draft Co-operatives Regulations, 1997.
  • Development of model rules for co-operatives, 1997.
  • Review of the Associations Incorporation Act, 1997.
  • Review of fund raising provisions of the Co-operatives Act, 1999.
       Submissions to inquires

  • Australian Government - General Practice Review, 1997.
  • Australian Senate Employment, Education and Training Reference Committee - Regional Employment and Unemployment Inquiry, 1998.
  • Australian Training Authority - Small Business Training Scoping Study, 1998.
  • Victorian Department of Human Services - Response to discussion paper: Towards a Stronger Primary Health and Community Support System, 1998.
  • Victorian Education Department - Schools of the Third Millennium Project, 1998.
  • Multimedia Victoria - Review of Victoria's Information Technology & Multimedia Policy, 1999.
       Other public policy issues

  • Was represented on a customer consultative committee working party of the Victorian Regulator-General on electricity industry restructuring, 1995.
  • Obtained a commitment from the Victorian Treasurer that the state government had no policy objections to the formation of electricity purchasing co-operatives, 1995.
  • Made representations to the Victorian Minister for Transport to successfully reverse a VicRoads policy prohibiting the registration of motor vehicles by co-operatives, 1995.
  • Participated in a workshop organised by the Office of Fair Trading and Business Affairs to review the role and functions of its Co-operatives Unit, 1995.
  • Made representations to the Victorian Minister for Housing over the government's preference for public companies to manage public housing instead of a range of corporate options including co-operatives, 1997.
  • Made representations to the Victorian Minister for Natural Resources and Environment to support forestry co-operatives, 1998.
  • Made representations to the Victorian Minister for Education on the government's Self Governing Schools policy, 1998.

       Guest speakers at federation functions

  • Bill McGrath MLA, Victorian Minister for Agriculture, 1995 Annual General Meeting (AGM).
  • Chris Strong MLC, Chairman, Victorian Parliament Economic Development Committee, 1996 AGM.
  • Mark Latham MHR, Federal Opposition Spokesperson on Education, 1997 Co-operative Opportunities Seminar.
  • Rhonda Smith, Commissioner, Australian Competition & Consumer Commission, 1998 AGM.
OBJECTIVE 3
Promote co-operatives to the public.

  • Produced a professionally designed brochure - Introducing co-operatives, 1995.
  • Presented a paper, Treegrowers Co-operatives - The Key To The Future Of Farm Forestry, to a farm forestry conference, 1997.
  • Responded to an article in The Weekly Times newspaper which supported the conversion of co-operatives to public companies, 1997.
  • Represented at the Australian Council of Social Service annual conference, 1997.
  • Presented a paper to the Third Communities Networking Conference, 1998.
  • Presented a paper to the 4th Australian Association For Social Research Conference, 1998.
  • Interviewed by ABC Regional Radio on electricity co-operatives, 1998.
  • Contributed co-operative information to the following publications -
    • Australian Dairy Co-operatives, Planning for the future, Dairy Research & Development Corporation, 1996.
    • National Co-op Update, Substitution Pty Ltd, 1996-99.
    • Australian Farm Journal, Agricultural Publications Pty Ltd, December 1997.
    • Commercial Law Newsletter, Law Institute of Victoria, April 1997.
    • Building Rural Futures Through Co-operation Study Circle Kit,
      Monash University Centre for Rural Communities, 1997.

OBJECTIVE 4
Facilitate and promote the formation of co-operatives.
  • Administered a grant from the Lance Reichstein Foundation to promote electricity co-operatives, 1994.
  • Initiated a Co-operative Opportunities Project on new opportunities for co-operatives in forestry, health, electricity supply and local government outsourcing, 1996.
  • Published 4 discussion papers on the above opportunities for co-operatives, 1996,97.
  • Jointly sponsored a seminar on Opportunities for Co-operatives in the Electricity Industry with Co-operative Energy Ltd, 1996.
  • Addressed the 1996 conference of the Victorian Strawberry Growers Association, resulting in the formation of the Australian Fruit Marketing Co-operative Ltd in 1997.
  • Organised a Co-operative Opportunities seminar, 1997.
  • Held an Options for Co-operatives in Health Care seminar, 1997.
  • Jointly sponsored the Building Rural Futures Through Co-operation project with the Monash University Centre for Rural Communities, 1997.
  • Reviewed the Office of Fair Trading and Business Affairs draft booklet - Guide to forming and running a co-operative, 1997.
  • Received a grant from the Lance Reichstein Foundation to print a Co-opEnergy Kit and the federation's discussion paper - Co-operative Opportunities in the Electricity Industry, 1998.
  • Assisted in forming the following co-operatives -
    • Australian Fruit Marketing Co-operative Ltd
    • Co-operative Energy Ltd
    • Gippsland Wood Products Co-operative Ltd
    • Greenlands Co-operative Ltd
    • Master Mechanics Co-operative Ltd

OBJECTIVE 5
Educate co-operative members and the community at large in co-operative principles and practices.

  • Organised the publication of a 5 page co-operative feature in The Weekly Times newspaper celebrating 100 years of the co-operative movement, 1995.
  • Published 20 editions of the Victorian Co-operative News (VCN), and distributed to directors of federation members and other interested persons.
  • Published articles in VCN on the 1995 co-operative principles review.
  • Profiled member co-operatives in VCN.
  • Organised the People Centred Businesses seminar, led by Edgar Parnell of the UK Plunkett Foundation, 1995.
  • Supported the establishment of National Co-op Update in 1996, contributed articles and promoted the newsletter to members and other co-operatives in Victoria and interstate.
  • Sold publications on co-operative principles and practice.
  • Produced 6 booklets authored by David Griffiths on a range of co-operative issues, 1998.
  • Initiated the annual Co-operation Awards in recognition of the achievements by co-operatives and individual co-operators in Victoria, 1998.
  • Gave presentations to and organised itineraries for co-operative delegations from the following countries -
    • Indonesia.
    • Iran.
    • Slovak Republic.
    • Thailand.
    • United Kingdom.

OBJECTIVE 6
Facilitate co-operation between co-operatives.

Wherever possible, the federation utilised the services of the member co-operatives, and promoted their services to other members in the Victorian Co-operative News and other forums of the federation. The following is a list of members who provided services to the federation.

  • Asia Pacific Co-operative Training Centre Ltd - joint sponsoring of seminars.
  • Ballarat Community Education Centre Co-operative Ltd - printing of the Victorian Co-operative News, 1995-98.
  • Community Enterprise Network Co-operative Ltd - bookkeeping services to federation.
  • Co-operative Energy Ltd - jointly sponsoring the Opportunities for Co-operatives in the Electricity Industry Seminar.
  • Co-operative Purchasing Services Ltd - purchase of supplies and board meeting venue.
  • Victorian Producers' Co-operative Co Ltd - venue for meetings and seminars.

© Tony Gill 2004