ACCORD: FAQ

A: The International Co-operative Alliance (ICA), the apex organisation of co-operatives worldwide, defines a co-operative as "... an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically controlled enterprise".

A: Co-operatives are used for business and for community/social activities. Some co-operatives have commercial intents: they were formed by producers or consumers to improve their position in the marketplace. Some of these co-operatives distribute part of their profits to members as a dividend. Other co-operatives are formed to provide a range of community and social services, either for their members or the general public.

A: In Australia, a co-operative is one of a number of organisational forms that can be used for pursuing business or social ventures.

A major differentiation is made between financial co-operatives and non-financial or general co-operatives. Financial co-operatives engage in financial deposit taking and lending to members and they are regulated as non-bank financial institutions. Financial co-operatives include credit unions, building societies and friendly societies.

Co-operatives can be classified by the way they are incorporated. Most co-operatives, are incorporated under Co-operatives Acts, passed by Australian State or Territory Governments.

A few general co-operatives are incorporated as companies under Corporations Law. (The reason for this is explained, to some extent, by the fact that Victoria, unlike NSW and Queensland did not have separate co-operative legislation until 1953). These Corporations have structured themselves internally as co-operatives and qualify as such for taxation purposes. The Income Tax Assessment Act 1936 defines a co-operative as a company, which deals more than ninety per cent of the total value of business transactions with its members. Co-operative companies that meet the criteria in the Tax Act are subject to alternative tax rules to those applying to other companies generally.

Financial co-operatives, such as credit unions, are now required to incorporate as companies under Corporations Law.

General co-operatives can be classified as trading or non-trading co-operatives. Non-trading co-operatives have a non-profit distribution clause in their constitutions. This is the form most commonly used by organisations that pursue social rather than business activities.

Apart from formal co-operatives registered under these Acts, there are co-operative-type arrangements that people enter into, the most prominent arrangements following the model of food purchasing groups and baby-sitting clubs.

A: All co-operatives, except financial co-operatives, such as credit unions and building societies, are regulated by State and Territory Governments in Australia - the Federal Government has no direct administrative or ministerial responsibility for general co-operatives. The Corporations Law, administered by Federal Government, exempts from its operation, societies, associations or unions registered under the various Co-operative Acts of the States and Territories but has an influence on the interstate operations and fundraising by co-operatives.

Australian Prudential Regulation Authority (APRA) administers financial co-operatives under a common Corporations Law framework, along with other financial institutions. As companies, credit unions, building societies and friendly societies are supervised by the Australian Securities and Investments Commission (ASIC), subject to requirements stipulated by APRA and the Reserve Bank.

Acts governing general co-operatives in different States and Territories are given below:

State and Territory Governments have agreed to a national scheme, which will make Co-operatives law uniform throughout the Australian States and Territories, by including core consistent provisions into the Acts that they administer and control. In 1997, most States adopted the core consistent provisions, which include: the ICA Statement of Co-operative principles; active membership provisions; the abolition of the doctrine of ultra vires; director responsibilities; orderly takeover procedures, enhanced enforcement powers, consistent offence and proceedings provisions and increased disclosure requirements where appropriate. Work on making the legislation totally uniform is being continued by the Ministerial Council on Consumer Affairs.

A: In mid-2002, there were over 2,400 general co-operatives registered under the separate State Co-operative Acts in Australia. over ninety per cent of the general co-operatives in Australia were located in the mainland eastern seaboard states of NSW, Victoria and Queensland.

By late 2001, there were 7 organisations registered under Corporations Law, which qualify as tax co-operatives under the Income Tax legislation.

In July 2001, there were 209 credit unions in Australia; 18 building societies and 47 Friendly Societies.

State	Number of Co-operatives	%
New South Wales (NSW)	940	38.9%
Northern Territory (NT)	2	0.1%
Queensland (QLD)	232	9.6%
Australian Capital Territory (ACT)	3	0.1%
South Australia (SA)	92	3.8%
Tasmania (TAS)	51	2.1%
Victoria (VIC)	1013	42.0%
Western Australia (WA)	81	3.4%
TOTAL	2414

A: Most co-operatives are small organisations, in terms of their financial turnover. For example, in NSW, nearly 75% of the co-operatives had an annual turnover of less than $1.0 million during 2000/01 and only 4% of co-operatives had an annual turnover more than $10.0 million.

In terms of turnover, the national turnover of general co-operatives in 2001 was estimated at around $ 4.5 billion, with co-operatives in NSW accounting for approximately 80% of this figure. As could be expected, the agricultural co-operatives in Australia generated nearly $ 2.6 billion revenue. However, it has to be noted that raw turnover figures often understate the real income of co-operatives as turnover in some co-operatives include only the commissions paid to the co-operative.

In mid 2001, The total assets base of all credit unions amounted to $23.5 billion while the building societies had an assets base of 13.0 billion.

Some of the co-operatives, especially those in the agri-business sector are large organisations. The Business Review Weekly, in its list of top 1000 Australian Companies listed, in 2001, the following co-operatives registered under Co-operatives Legislation:

In the 2002 BRW listing of the Top 500 Australian Private Companies, Murray Goulburn Co-op, Dairy Farmers Group, Bonlac Foods, and Ricegrowers Co-operative were ranked 3, 10, 14, and 30 respectively.

A: Co-operatives can be found in most industries in Australia. The largest number of co-operatives are in the recreation and gambling clubs industry - bowling clubs, returned servicemen's clubs, ski lodges, etc. There are also significant numbers of housing co-operatives, school co-operatives (especially in Victoria), childcare and other residential care service co-operatives, and small retailing co-operatives.

According to a simplified classification of co-operatives developed by ACCORD, around 35% of co-operatives in NSW are Culture & Recreation co-operatives (such as clubs and ski lodges and over 20% are providing human services (such as housing, aged care and childcare services). Consumer co-operatives constitute about 10% of the sector while primary producer co-operatives form another 12% of the sector. This distribution of numbers does not reflect the distribution of turnover. Primary Producer co-operatives generate 85% of all turnover of the sector.

Generally, co-operatives form only a small part of any industry in which they are found. The exceptions are in rural industries. Co-operatives have significant market shares in dairy products and milk processing, rice marketing and cotton ginning industries in Australia.

A: In mid 2001, about 45% of all co-operatives were located in the major cities: Sydney, Melbourne, etc. while the rest was located in rural areas. The percentages between city-based co-operatives and rural co-operatives differ from State to State. In Victoria, around 65% of co-operatives were city-based but in NSW, only around 40% of co-operatives had registered addresses in Sydney and its suburbs.

Mutuals

A: Mutuals are primarily financial service organisations with members. The term 'mutuals' have two overlapping meanings in Australia. Conventionally, they refer to member-based organisations providing financial and insurance services. More generally, mutuals are organisations owned and controlled by members. In this context, co-operatives are mutuals but there are other organisations such as clubs, and trade unions, that are also mutuals.

A: According to a Technical Report from the Australian Non-profit Data Project: Dimensions of Australia's Third Sector by Mark Lyons and Susan Hocking, there were 1,996 financial and insurance mutuals in 1996. (This number included 1,822 organisations such as credit unions and co-operative housing societies, which have been listed above as co-operatives). These mutuals were engaged in providing finance, insurance and superannuation services to members. Since 1996, the number of mutuals has been reduced by demutualisation in these industries.

A: According to Dimensions of Australia's Third Sector, mutuals employed 30,804 persons and had a turnover of $ 23.0 billion. The contribution to the GDP by these mutuals was calculated at $1.2 billion.

Social Economy

A: The term 'social economy' is widely used in Europe to describe mutuals, co-operatives, foundations and associations.

Social Economy covers the same group of organisations referred to as the Third Sector. They are organisations, which are neither private, for-profit organisations nor public sector organisations. The Third sector consists of associations, charities, churches, clubs, community organisations, co-operatives, mutuals, non-profit organisations, unions, societies, etc.

A: According to Dimensions of Australia's Third Sector, in 1996, there were 34,456 organisations in the Third Sector, which employed people. There were up to several hundred thousand more that relied exclusively on voluntary workers. It is estimated that, 19,578 of these organisations were mainly 'member serving' organisations.