| Newsletter 20 - August 2004 | |
||||||||||||||||
|
We always appreciate your comments and contributions. Please email any suggestions or news items to the editor of ACCORD NEWS, Suzanne Henderson at suzanne.henderson@uts.edu.au. Contents in this issue
CommentaryColeambally Test Case – Nonprofits face hefty tax bills
Mark Lyons, Professor of Social Economy at UTS, examines the implications of a recent Federal Court judgement which ruled that a nonprofit organisation with a constitution that prohibits the distribution of surplus assets to members on winding-up, cannot be considered a mutual and is ineligible to claim a tax exemption for member-generated income. "There are good public policy reasons for hoping that the full bench will overturn [Justice] Hill's decision. Alternatively, another way of protecting important community assets against demutualisation must be found and urgently implemented," Mark Lyons. "In essence what the judge has done is to determine that a social economy or third sector organisation can be a public serving nonprofit...or a member-benefit organisation, but it cannot be both. This has interesting implications for both the directors and managers of social economy organisations, and for nonprofit/third sector/social economy theory, " says Lyons. "There are good public policy reasons for hoping that the full bench will overturn [Justice] Hill's decision. Alternatively, another way of protecting important community assets against demutualisation must be found and urgently implemented." Mark Lyons, Adjunt Professor, ACCORD. Back to TopRisking co-operative status – communications are the key?
Listing of co-operative shares on the stock market, need not spell the end of co-operative principles writes Ian Reid. But, a constitution specifying a minimum 75% threshold for change and maintaining active communications with the transacting shareholders so they continue to value their dealings with the co-operative, are essential, argues Reid. "In a co-operative, a positive and aggressive communications strategy is a vital ingredient for long-term success. Without this, co-operatives will invariably sink to self-interest and greed and the bankruptcy of the co-operative principles." "In a co-operative, a positive and aggressive communications strategy is a vital ingredient to success. "Without this, cooperatives would invariably sink to self-interest and greed and the bankruptcy of co-operative principles," claims Ian Reid. See also David Griffiths article "Why do co-opertives fail as co-opertives" "A co-operative is owned by its members and ongoing member education is critical to ensuring member control. Member education is the continuous process by which members see the connection between their individual interest and group interest ....
Blame it on the (Red) nose "Co-operatives, then, fail as co-operatives when they cease practicing co-operative values and principles. They may continue as a successful business - competitive, profitable and growing and open to demutualisation." David Griffiths Back to TopCollective Bargaining: Will it be Successful?
The process of collective bargaining to counteract market forces, will benefit from recent legislative changes, but only if there is a full commitment to the negotiation process, writes Eddie Oczkowski, Associate Professor, economics and quantitative methods, School of Management, Charles Sturt University and Co-director of ACCORD. "The concept of countervailing market power is also one of the often cited principle motivations for the formation of co-operatives." Eddie Oczkowski. "In essence, the concept of collective bargaining by small businesses and farmers with larger organisations and processors is consistent with John Kenneth Galbraith’s ‘countervailing power’ notion of the natural tendency of individuals to form organisations to counteract the market power of large corporations. The concept of countervailing market power is also one of the often cited principle motivations for the formation of co-operatives, " Eddie Oczkowski. Back to TopACCORD ProjectsSupport for cooperatives runs high - Australian Social Attitudes SurveyACCORD has released the findings of the first ever Australian Social Attitudes Survey. More than a quarter of Australians believe co-operatives are the best providers of banking and insurance services, according to the first Australian Social Attitudes Survey. 22% believe them to be the best providers of food retailing. According to ACCORD Senior Research Fellow, Andrew Passey, these are surprisingly high figures given the emphasis placed on the shareholding market economy in Australia. "People clearly want a choice", Passey says. "Our survey shows that many prefer organisations that are owned by their members, and where members have a greater say in the way their organisation is run, rather than simply being a taxpayer or shareholder."
UTS/CSU/ACCORD successful in ARC grantThis project titled Cosmopolitan Heritage in a Multicultural Society: Ethnic Communities and the Built Environment in Australian Cities and Regional and Rural Areas, investigates the historical and contemporary contribution of minority ethnic communities to the built environment of Australian cities and towns. This is significant because the story of the impact of minority ethnic communities on the built environment has been ignored in the Australian immigration debate. The focus is on regional and rural areas as well as cities. Expected outcomes include: a stocktake of ethnic heritage; an insight into social aspects of the built environment; an understanding of how ethnic heritage relates to community relations; and an investigation into ethnic precincts and the links between ethnic heritage and increased tourism. The project will be conducted over three years. Partner organisations are: National Trust of NSW; The National Trust of Australia (WA); Department of Premiers and Cabinet, Qld; and the National Trust of South Australia. Back to TopCo-operative ProfileCrossroads – A Medieval Story
From initial registration in 1992, Crossroads Medieval Village Co-operative has been quietly working on the construction of a medieval village including; campground with cabins for medieval events, a residential area with a medieval theme, a re-creation of a small castle for educational and tourist purposes, and a medieval crafts centre. Rhys Howitt reports on the activities of this small co-operative of medieval enthusiasts. Back to TopThe Co-operative AdvantageValuing social enterpriseThe valuable role of social enterprise is increasingly recognised around the world. In the UK, The Social Enterprise Coalition (SEC) is the trade body that brings together all types of social enterprise to promote the sector and share knowledge. The SEC plays a dual role of influencing the policy agenda and promoting best practice. Recently a number of proposals for legal reform in the UK have been proposed including: the creation of a new legal form, the Community Interest Company (CIC); modernization of Industrial and Provident Society legislation (the UK Cooperatives Act); and proposals to create a new legal form for charities (The Charitable Incorporated Organisation).
Get healthy the co-operative way The SEC is working closely with the UK Department of Trade and Industry on the drafting of legislation relating to CICs. For further information visit CICs page. Is this the kind of "social economy" direction we need in this country as well? Back to TopUK social enterprise takes lead from the Scandinavians
In Scandinavia, where wind power provides nearly a third of the country’s energy needs, social enterprises have a well-established role. The concept of community involvement rather than private finance is common in Europe, the largest example being the 40MW offshore wind farm, Middlegrunden in Denmark that has over 8,000 members. Using the renewable energy models pioneered in Scandinavia, the Baywind Energy Co-operative was formed in 1996 to offer community ownership of the Harlock Hill wind farm project in Cumbria. A successful energy generating business, now in its eighth year, Baywind invests a proportion of its profit in promoting energy saving among schools and the local community. Back to TopNew UK organisation promotes employee buy-outsA thriving electrical contracting firm in mid-Wales town of Newtown, provides a case-study of successful employee-owned business principles at work, explains Andrew Bibby. According to Gregory Cohn, coordinator of Tower Hamlets Co-operative Development Agency and a founder of Succession London, the aim is to find solutions for business owners wanting to retire or move on whilst at the same time helping existing employees keep their jobs. "Everyone can end up a winner this way," he says. Cohn argues that up to now business advice culture has paid insufficient attention to issues of small business succession, which can lead to unnecessary business liquidations. Back to TopMore on employee share ownership in AustraliaRecent articles in our newsletter on the issue of employee share ownership, have generated considerable interest. Read more on ESO in Australia
What is Social Enterprise? In Europe and North America, where community economic development processes are most advanced, the long-term economic benefits of employee ownership are widely recognised. The low rate of growth of employee ownership in Australia (as distinct from employee share schemes in the larger public companies) remains a puzzle. "The evidence is there that employee ownership is a viable local economic strategy needed by local economies in Australia. To introduce and support it in local economic development activity, a "Call for Partners" has been made to participate in the establishment of an Employee Ownership Development Agency along the lines of those operating in other countries... If you think you can make a contribution to these developments, I would be keen to hear from you," Alan Greig, Social Enterprise Technologies (SENTECH). Please contact ahgreig@bigpond.com.au. Back to TopEuropean Dairy Co-operatives top-20
Netherlands and Norwegian researchers have produced the first ever top-20 ranking of European dairy cooperatives. The comparative study covering strategy, capitalization and economic performance, is based on a new approach to measuring performance - separating milk content from dairy product value, thus enabling the study to distinguish returns to milk (on-farm investment) from returns to capital (cooperative investment). "If members don't benefit from cooperative investments, cooperatives will lag behind in terms of value adding capacity". Senior Researcher, ir. Onno-Frank van Bekkum "The application of conventional financial performance ratios to cooperatives rejects the fact that the cooperative mission is not to accumulate profits at company level (other than securing the continuity and growth of the company). Therefore it doesn't make sense to compare cooperatives on this basis."
"If members don't benefit from cooperative investments, cooperatives will lag behind in terms of value adding capacity". Eventually these cooperatives will lose ground in the market place. Or end up in the bottom end of the market, which, given the trend of market liberalization, is not an attractive prospect for dairy farmers in the vast majority of European countries." European Diary Cooperative Top-20
Mondragon Young people are the futureA new "Co-op Commission" to bring together the various youth initiatives in the co-operative movement could lead to 2005 being designated as the Year of Young People. Woodcraft Folk vice chairman Richard Lace said the time to act is now after years of discussing and prevaricating over how to involve more young people in day-to-day co-op activities and democracy. He said many young people have co-op values and principles, but do not realise they form the core of a living, vibrant movement. "We want to form a Youth Commission to bring together everyone’s ideas. We want to probe into all the corners of our movement to reveal our strengths and weaknesses and suggest concrete actions. The Youth Commission would be owned by young people and follow on from the findings of the Co-operative Commission in 2001." More... Back to TopICA NewsYear of Microcredit – Opportunity for Co-ops Training Pack On ILO Recommendation 193 Launched These stories from the ICA Weekly digest. Copies of the digest are archived on the ICA's website Back to TopNews in BriefAustraliaNSW Co-op collapse inquiry hears of mismanagement Energy co-op generates public interest Dairy Farmers Co-operative votes to support restructure Co-op Loss
Organics Industry Grows on the Mid north coast OverseasUKGreen light for Co-op schools Co-op project offers tenants a new deal Corporate responsibility Co-op Group’s priority Other territoriesBurkina Faso: Village Co-Operative Works for Electrification FG promulgates co-operative development policy Facing the challenges of globalisation What's OnIn AustraliaThe welfare revolution Leading Organisations into the Future: Leadership & Management Institute 2004 Social Ventures Australia Essentials Series 2004 Australia New Zealand Third Sector Research Conference Education and Social Action Conference
6 December 2004 OverseasVertical Markets and Cooperative Hierarchies: The Role of Cooperatives in the International Agri-Food Industry International Cooperatives Forum 2004 (ICF 2004) 4th Regional Workshop for Managers on "Management of Consumer Co-operatives in Asia-Pacific" ICA Board Meeting The Co-operative College 2004 International Programme: "The importance of Women in Co-operatives Today" – a programme about women for women The Co-operative College 2004 International Programme: English Through Co-operation – language training programme We welcome your comments on our newsletter and any suggested topics or items for inclusion in the next issue, due for publication in September. If you have any items of interest please ensure that these are forwarded to suzanne.henderson@uts.edu.au by 27 August 2004. To refer a friend or to unsubscribe, please e-mail: accord@uts.edu.au. All contact information provided will be kept strictly confidential. |
|||||||||||||||||
21 September 2006 11:36 AM
Send comments about this page to ACCORD