Dear Members

Welcome to the fourth instalment in our biannual Members’ Review. The following pages provide a snapshot of the Council’s activities over the last six months and demonstrate the impressive power

of the sector when it acts together in a committed and sustained manner.

In the last issue of the Review, in July, I remarked that the litmus test of what we can achieve when united around a common strategy and brand awareness, is the progress we are making on the 17 recommendations of the 2016 Senate Inquiry. At that time, we had received the announcement by the Treasurer, Scott Morrison, that he was setting up an independent inquiry, the Hammond Review, to examine access to capital barriers for Federally registered co-ops and mutuals. The Treasurer’s inquiry looked specifically at recommendations 4, 16 and 17 of the Senate Recommendations. This was concrete evidence that we could maintain the momentum we had built as a sector for recognition and representation at the national policy level.

The Treasurer’s recent announcement in November that the government was adopting all 11 recommendations of the Hammond Review vindicated confidence in the sector’s united voice.

It also shows the huge strides we are taking together as a sector: Successfully landing a Senate inquiry into the CME sector; identifying shared goals and visions and lobbying together for reform; and working with international organisations such as Mutuo on strategies to emulate the best practice reforms which have been legislated for elsewhere. This is a process that has taken time,

patience and has required the involvement and energy of many individuals and organisations and I want to thank all of our Members and partners for your invaluable contributions to our shared aims.

In 2018, we will continue to work hard to ensure the Government follows through on its mutual reform agenda, but do so with the knowledge that our approach is working.

We also look forward to the launch of our new website. This will include a tool to digitally locate Australia’s co-ops and mutuals, which will help bring attention to, and remind us of, the large ‘ninja economy’ that is the CME sector. We know that 78% of people prefer to do business with a co-op or mutual once they understand the business model; using the map tool, people will be empowered to find local CMEs to do business with. This builds on our consumer-focused campaigning, such as our switch campaign, #switchdontbitch, aimed at convincing customers that there’s no better time than right now to find a better values business.

2018 beckons with initiatives from the capital reform work to ratifying of the CME Corporate Governance Principles developed by the BCCM Chairs’ Forum, and the development of a ‘Marketing Mutuality’ brand book for members. With input from the sector, we hope to see the CME brand identity further developed for our mutual benefit.

This is also a time when we bid farewell to BCCM Chair, Dr Andrew Crane, and thank him for his huge service during our early years as a new business advocacy body. I wish to welcome incoming Chair, Terry Agnew, as we embark on the next exciting growth phase.

On behalf of the whole BCCM team, I wish all Members and their friends and family a very happy 2018.

Members’ Review Issue 2 Volume 2 January 2018

Melina MorrisonChief Executive Officer

Business Council of Co-operatives and Mutuals For an enterprising nation www.bccm.coop info@bccm.coop Twitter: @BCCM_AU

Melina’s message to members

Changes at the BCCM

Dr Andrew Crane stepped down as BCCM Chair on 30 November 2017 after four years in the role of leading a start-up organisation. Significant during his tenure was Andrew’s involvement in the Business 20 group advising the G20 meetings in

Australia, Turkey, China and Germany. Dr Crane was the first co-operative business leader to be appointed to a B20 group ever; in Andrew’s case, by then Prime Minister, Tony Abbott, to the B20 during Australia’s presidency of the 2014 G20 meeting.

In 2018, we welcome Terry Agnew, CEO RAC WA, as the new Chair of BCCM. Under Terry’s leadership, RAC WA is engaged in transformative transport innovation, that has recently seen Perth become one of just three cities in a global driverless vehicle trial.

We also welcome four new directors to the BCCM board: HCF CEO Sheena Jack; CUA CEO Rob Goudswaard; CBH Group CEO Jimmy Wilson and National Health Co-operative CEO Adrian Watts.

At a time when Australia’s 2100 CMEs can plan for a capital fuelled future by expanding services, or pursuing new opportunities, BCCM’s board has first-rate experience in the areas of finance, mutuality, business transformation, health and agricultural investment.

We would also like to take this opportunity to thank our retiring director, Stephen Nash, CEO of Common Equity Housing Ltd which houses more than 5000 low

income Victorians. Stephen contributed his insights on the role of co-operative housing to address affordability and other issues in housing Australian’s equitably.

International RepresentationThe representation of Australian CMEs internationally continues to grow through the work of the BCCM. BCCM founding director Greg Wall was re-elected to the global board of the International Co-operative Alliance at the biennial General Assembly on 17 November. For the past four years, Greg has used the opportunity of his role on the board of the global peak body to increase awareness of the CME sector in Australia and promote co-operative to co-operative trade and development especially in Asia Pacific.

At the same Assembly, Adrian Watts, CEO of National Health Co-operative and newly appointed BCCM director, was elected to the International Health Co-operative Organisation board. In his role, Adrian will promote stronger links and sharing of best practice between our region and health co-operatives and mutuals around the world.

BCCM’s communications work and research on the scale of the sector in Australia, is held up as best practice. BCCM CEO, Melina Morrison and BCCM Policy Officer, Anthony Taylor, presented the communications strategy of the BCCM to international delegates during the Assembly. Melina also spoke on a panel about role of co-ops and mutuals in the sharing economy.

Retiring BCCM Chair, Andy Crane

Greg Wall, Group CEO Capricorn, speaks at ICA General Assembly

Celebrating the new Global Board in KL, Malaysia (L to R) outgoing ICA President Monique Leroux; incoming President Dr. Ariel Guarco; and Malaysian representative Kamarudin Ismail

New BCCM Chair, Terry Agnew

Celebrating the new Global Board in KL, Malaysia (L to R) outgoing ICA President Monique Leroux; incoming President Dr. Ariel Guarco; and Malaysian representative Kamarudin Ismail

Government Relations

Hammond Review – Treasurer’s Announcement The big news of the past 6 months in government relations and policy was the Treasurer’s announcement, made on 8 November at CUA’s Burwood branch, that the government was adopting all of the recommendations of the Hammond Review to help to facilitate growth in the co-operative and mutual sector.

This means, first, that a “mutual company” definition will be included in the Corporations Act. Second, mutual companies will be able to issue a “mutual capital instrument” which will provide access to capital for long-term business investment without risking the mutual status of the company.

The Government announcement is part of the formal response to the Senate Inquiry into cooperatives, mutuals and member-owned business, which called for these reforms to be enacted.

Over the last two years, a project partnership of BCCM members, from a range of industry sectors, has worked to build a consensus around what shape the reforms should take. This group will continue to work alongside Treasury and Regulators as they begin work to draft the new legislation.

We know this is going to be a massive practical change for our members. It will give you the flexibility to raise capital for growth in a way that will benefit members and maintain purpose.

We also took notice of both Scott Morrison and Senator Bridget McKenzie articulating that this was about recognition of the mutual sector. Symbolically, as well as practically, this is a big step forward for our sector - proper recognition from politicians and policy makers of all stripes will be the basis for further favourable reforms that allow us to get on with delivering value to members and the community. In a rare show of bipartisanship, the reforms are supported by all sides. Speaking at BCCM’s annual Leaders’ Summit, Labor Shadow Assistant Treasurer Dr Andrew Leigh affirmed Labor’s support for the implementation of the Hammond recommendations.

In the next 6 months BCCM will be steadfastly focused on working with our partners to ensure timely implementation of the mutual capital legislation.

Out and About for Co-operatives and Mutuals Submissions, Hearings, Meetings:While our sector covers practically every part of the Australian economy, the basis for our engagement strategy is to draw policymakers’ attention to the Senate Economics References Committee recommendations and our desire to see an even playing field for co-operatives and mutuals across all parts of the Australian economy. In the past 6 months we have made 30

submissions and appeared at hearings for inquiries in the following areas

- Mutual Capital Reforms (Hammond Review)- Financial services (including BEAR Bill consultations,

Treasury consultation on Reducing Barriers to New Entrants to the Banking Sector, Productivity Commission inquiry into Competition in the Australian Financial System, APRA consultation on Common Equity Tier 1, Treasury review of Open Banking)

- Regional development, agriculture and irrigation (including South Australian Primary Producers inquiry, NSW Regional Start Up inquiry, Productivity

Melina Morrison, CEO, BCCM, speaks on behalf of the sector at the Treasurer’s Announcement

From left to right, Senator Bridget McKenzie; Greg Hammond OAM; The Hon. Scott Morrison; Wendy Machin, Chair, COBA; Melina Morrison, CEO, BCCM

Shadow Assistant Treasurer Dr Andrew Leigh MP commits Labor to the Hammond reforms at the BCCM Industry Dinner

Commission Transition Regional Economies inquiry, Productivity Commission National Water Reform inquiry, Senate inquiry into Regional Development and Decentralisation, Northern Australia Infrastructure Facility Bill inquiry)

- Housing (Treasury consultation on Increasing the Supply of Affordable Housing, Treasury consultation on the Housing Finance Corporation, NSW inquiry into Retirement Homes)

- New car retailing (ACCC New Car Retailing Market study)

- NDIS (Senate NDIS Outcomes inquiry, Productivity Commission NDIS Costs inquiry)

- Human services (Productivity Commission Human Services inquiry)

- Health insurance (Senate inquiry into the Value and Affordability of Health Insurance)

- Modernisation of business registers (various)All BCCM submissions are available on our website.The BCCM has continued to engage with elected representatives around Australia, and recently met with:- The Treasurer, the Hon Scott Morrison- The newly elected Deputy Leader of the Nationals,

Senator Bridget McKenzie- Assistant Minister to the Prime Minister, Senator

James McGrath- Minister for Small Business, the Hon Michael

McCormack- Advisers to the Minister for Energy, the Hon Josh

Frydenberg- Advisers to the Minister for Regional Affairs- Senator Barry O’Sullivan- Shadow Assistant Treasurer, the Hon Dr Andrew Leigh- Advisers to the Shadow Treasurer, Hon Chris Bowen- Kevin Hogan MP, Member for Page- Sussan Ley MP, Member for Farrer- Austin Evans MP, NSW Member for Murray

Paddock to Plate in South AustraliaHaving advocated strongly, the BCCM is pleased with the co-operative focus of the final report of the South Australian inquiry into primary producers, which was released in December. The Committee recommended that the South Australian government improve its online information about co-operatives and ensure co-operatives are able to apply on an equal footing for all government grants. BCCM was already working with the South Australian Government to improve co-operative business information and the recommendation gives further impetus to this work.

Queensland Co-operatives LegislationThe BCCM has been in dialogue with the Queensland government about adoption of the Co-operatives National Law. Ministers and Shadow Ministers from the ALP and the LNP attended our Summit, which occurred during the Queensland state election period; bipartisan recognition for the importance of our sector. We will continue our work with the re-elected Palaszczuk Government on the prompt adoption of Co-operatives National Law in Queensland.

AASB: Co-operative AccountingThe BCCM is working closely with the Australian Accounting Standards Board to produce a guidance note on co-operative and mutual enterprises for accounting professionals. This relates to the recommendations of the Senate Inquiry around the education standards for accountants. This is an important step in BCCM’s work to ensure CME financial reports are appropriate for purpose. The note is nearing completion and should be published early in 2018.

BCCM Leaders’ Summit 2017

Shadowlands: Adversity as Advantage for CMEsIn what is now an annual tradition, the Summit was opened with the Taste of Australia Dinner, featuring the finest Australian co-operative produce.

Honouring LeadershipSponsored by Beyond Bank, the dinner occasioned the inaugural BCCM Honour Roll for Outstanding Service. The three inductees in 2017 were Andrew Crane (CBH Group), Alan Beanland (CUA) and Kyle Loades (NRMA),

who have had very different journeys in the mutual sector but are united by the valued characteristic of being able to lead people and

organisations through disruption and growth. As the first people inducted into the BCCM Honour Roll, they demonstrate the extremely high standards of the sectors leaders. We thank them for their service.

KeynoteThe keynote speaker was Yves Morieux, Senior Partner & Managing Director, Boston Consulting Group. He shared his ideas for increasing the competitive advantage of CMEs through the sophisticated management of

BCCM Leaders’ Summit. BCCM inaugural Honour Roll for Outstanding Service Inductees Andrew Crane, Alan Beanland and Kyle Loades

complexity in organisations. Smart Simplicity is a global management system phenomenon used by leading firms, but its deepest impact is experienced when implemented inside co-ops and mutuals.Following strong demand, Yves agreed to the video of his speech being made available privately to BCCM members.

Research LaunchesA number of research projects were launched at the Summit, signalling an invigorated interest in co-operatives and mutuals in the research sector.

Inclusion mattersEliza’s Project: Advancing Gender Equality in the CME Sector, delivered by BCCM and Per Capita, with funding from Bank Australia, undertook research into gender and inclusion in the co-operative and mutual enterprise sector in Australia. The objective of the project is to help CMEs move towards being the most inclusive sector and to engender an environment where all people can thrive. The report showed that CMEs have work to do on this front. A working group has been set up to implement the recommendations that came out of the report.

Accounting for CMEsThe Mutual Value Measurement Project, a 2 year collaboration between Monash University, BCCM and leading CMEs, will develop a framework to capture the total economic and social value creation of CMEs. This important project will allow CMEs to clearly demonstrate the value they deliver to members and the community. The project totals $1.1 million including $.0.6m contributions from industry partners.

State of the sectorThe BCCM launched its annual National Mutual Economy Report at the Summit. It included, for the first time, modelling of the Total Value Added to GDP of the CME

sector (8.3%), as well as of CME direct employment figures (146,440). The NME report is an important advoacy tool providing evidence of the important contribution of the CME sector to the Australian economy.

The Co-op Sharing Economy The platform economy is increasingly important as we move deeper into the digital age. There are excellent opportunities for co-operative and mutual enterprises to enter this economy, as higlighted at an international platform cooperativism conference in New York City in November. BCCM is interested in the potential for CMEs to move into the platform economy

as well as for start-up platform co-ops to provide services for established CMEs.BCCM hosted Associate Professor Trebor Scholz, New School, NYC, during his trip to Australia earlier this year. Trebor is a key figure in the global platform co-operative movement. Trebor’s visit generated intense academic interest and BCCM is now working with UNSW and UTS on research into the role of co-operatives in the evolving areas of platforms, sharing economy, casualised labour markets and digital start-ups.

Delivering the third way in human servicesIn early December BCCM brought Professor Sir Julian Le Grand to Australia to discuss social policy and innovation in consumer directed markets. As well as advising a number of European governments, Sir Julian worked with former British Prime Minister Tony Blair on reforms to health and social service delivery in the United Kingdom. Australia is facing the challenge of finding better ways to deliver human services, not least the NDIS, and prepare for the looming surge in demand on aged care services. Sir Julian engaged with universities, government and the CME sector about the role of public service mutuals which Sir Julian has experience with in the UK over the last decade. This builds on the work BCCM has done over the last three years to raise the potential of this ‘third way’ in delivering public services.

Chairs Back Governance ReformChairs attending the fifth CME 100 Chairs’ Forum on 9 November heard from guest speakers Eva Scheerlinck (CEO, Australian Institute of Superannuation Trustees) and Bill Wilson (Director of Agribusiness Consulting, Farm Credit Council Services , USA) before considering a set of draft governance principles prepared by the BCCM in consultation with a sector working group. The BCCM has circulated the draft principles to the broader sector for feedback. The BCCM is pleased that, as a sector, we are continuing to make steady progress towards stronger governance standards for co-operatives and mutuals.

Welcome New Members!BCCM welcomes our new members who joined over the last six months:• PoliceBank• BankVic• BankFirst• QueenslandCountryCreditUnion• IMBBank• GeraldtonFisherman’sCo-operativeLtd• TravellersChoice• CooperativesAlliance

Education Update• AIMWAProfessionalDevelopmentCourseforCME

Managers and Directors (Melbourne, February)- BCCM has been working with AIM WA to bring

their professional development course to CMEs around the country. This is the only such course in Australia, and we have responded to requests from members to make it more easily accessible. Look out for communications from us as we bring it up the east coast!

• UniversityofNewcastle’sGraduateCertificatein Co-operative Management and Organisation (Newcastle, February)

- BCCM has negotiated with the Farming Together program to fund enrolment in the course for 60+ co-op development consultants. We are pleased to be able to upskill consultants working in this area to increase the quality of services available to CMEs.

Upcoming Events List• BradleyAllenLovelawyerswebinarsserieson

legal issues faced by co-ops (February; April; June; August)

• CapitalSymposium–lookingatdebt,equityandCCUs and the best way of raising capital for your organisation (Melbourne, March)

• ParliamentaryFriendsofMutualsandCo-operatives event (Canberra, March)

• 6thCME100Chairs’Forum(Canberra,March)• BCCMAGM(Adelaide,November)• BCCMIndustryDinner(Adelaide,November)• BCCMLeaders’Summit(Adelaide,November)• 7thCME100Chairs’Forum(Adelaide,November)

Look out for communications from us regarding these and other BCCM events!

At the Governance Institute’s National Conference in December. From L to R: Interviewer; Judith Downes, Bank Australia Chair; Peter Promnitz, Australian Unity Chair; Melina Morrison, BCCM CEO; Professor Sir Julian Le Grand

BCCM - The Last Six Months in Photos

BCCM Industry Dinner MC, Annabel Crabb, flanked by the Hon Michael McCormack MP (LHS) and the Hon Dr Andrew Leigh MP (RHS)

BCCM CEO Melina Morrison (centre left) chaired a panel hosted by ACCI with Minister Assisting the Treasurer Michael Sukkar, MP (centre right). On the left, former ACCI Chair Terry Wetherall; on the right Professor Robert Deutsch, Senior Tax Counsel, The Tax Institute

Parliamentary Friends of Mutuals and Co-operatives launch, co-chairs Senator Bridget McKenzie (Nationals) and Dr Andrew Leigh MP (Labor) cut the cake!

Yves Morieux, Senior Partner & Managing Director, Boston Consulting Group, made the keynote address at the BCCM Leaders’ Summit

BCCM Honour Roll Inductees received a handcrafted gold BCCM pin

Co-operative produce at the Taste of Australia Industry Dinner

ACCI Christmas Luncheon. From L to R: Local Member Julia Banks MP; Melina Morrison, BCCM CEO; Hon Kelly O’Dwyer MP, Minister for Revenue and Financial Services

About the Business Council of Co-operatives and MutualsThe BCCM is the peak cross-sector body for co-operatives, mutuals and member-owned businesses. Its purpose is to promote recognition of the important role of co-operative and mutual businesses in the economy and community development of Australia.

BCCM membersBCCM members are leading Australian CMEs from across all industry sectors. Our members include known household brands, industry peak bodies and leaders in health, housing and education. We thank the members of the BCCM for their continued support and leadership.

Full members

Associate membersIndustry Peak members