Speech by Hon Kevin Andrews MP

Address at the launch of the BCCM White Paper, Parliament House

Location: Canberra


Thank you, Tony, for that kind introduction.

As Minister for Social Services I preside over a Department that’s responsible for roughly one-third of the Commonwealth’s Budget outlay.

As you can very well imagine, I am frequently asked to speak at events or programme launches.

But there are invitations and then there are invitations.

And this occasion is found in the latter category.

I’m extremely pleased to be here this afternoon because the Business Council on Co-operatives and Mutuals exemplifies the philosophical worldview that governs the Liberal approach to public policy.

Ronald Reagan once quipped that the big-government instinct on matters economic could be summed up in three short phrases:

“If it moves, tax it;

If it keeps moving, regulate it;

If it stops moving, subsidize it.”

The French have a word for this attitude – dirigisme.

This term has sadly made its way into the English language and is defined by the Oxford Dictionary as “The policy of state direction and control in economic and social matters.”

But the BBCM constitutes the antithesis of dirigisme.

It’s a private sector initiative that seeks to achieve good things through self-initiated cooperation rather than through state-imposed coercion.

It promotes, not dependency, but self-sufficiency.

Rather than the cumbersome one-size-fits-all heavy hand of government regulation from on high, BCCM fosters flexible, adaptable grass roots solutions that respond to individual needs.

And you have considerable form in this regard.

Australian co-operatives and mutual societies have been around since long before the modern welfare state was even envisaged.

As early as the 1860s, so-called “friendly societies” had become major institutions in local communities, large and small.

Many of these ‘friendly societies’ were focused on the provision of medical services and support for those fallen on hard times.

They were organisations composed of individual Australians who came together of their own volition to address community needs.

By the eve of the First World War – just over 100 years ago – around 400,000 friendly society members helped to fund benefits for over one million Australians.

And it’s interesting to note that during this same period fewer than 100,000 Australians were receiving benefits from the Commonwealth.

Today the BCCM represents over 13 million Australians who belong to 1,600 co-operatives and mutuals throughout the country.

And the sector plays a substantial role in our national economy, generating a turnover of $17 billion per annum.

That’s a good start.

But it gives rise to the question how we – the Government – can help you – the co-op/mutual sector – take things to the next level.

The White Paper we’re launching here today provides part of the answer.

Public Service Mutuals: A third way for delivering public services in Australia makes a serious contribution to the public policy discussion on this issue.

It rightly relates how the context for delivering public services in Australia is in the throes of dynamic change.

And it argues we must adapt as well to keep pace with these emerging challenges.

One of the most salient of those challenges stems from the need for fiscal constraint at home within the framework of a turbulent economy abroad.

Here in Australia we’ve so far managed to escape the worst of what some have come to call the ‘Great Recession’.

I would strongly contend that our present good fortune stems from the past good fiscal policy of John Howard and Peter Costello.

Instead of a solid fiscal rampart that could insulate Australia from global economic instability, last September we inherited a serious debt and deficit challenge.

And that means serious structural reform of government is an absolute imperative.

At the heart of that reform agenda is the proper balance between productivity and humanity.

Or in other words – how do we build an Australia that both promotes economic vitality and preserves social responsibility?

How do we accommodate the needs of an ageing population that deserves high quality medical treatment and first-rate long-term care without breaking the budget?

How do we provide sorely needed support for the seriously disabled without borrowing our way into European-style fiscal crisis?

These are the salient questions that confront Australia in this year 2014.

And these are the questions on which the co-operative and mutuals sector has much to teach us.

By instinct the Abbott Government is the party of limited government.

The question I’m keen to explore is how we, the Government, can help you, the co-operative mutual sector, take things to the next level.

This challenge is what makes this White Paper such a timely document.

It moots the development of a ‘third way’ that harnesses mutuals and co-ops to the task of social service delivery.

This is done through a collaborative governance structure that involves members in decision-making and bestows benefits on those same members.

The White Paper’s findings are an elaboration on the BCCM’s previous Green Paper that explored avenues in which cooperatives and mutuals might address disability, aged care or employment services.

It proposes a co-ordinated programme to raise public awareness about the potential public service mutuals to meet social needs.

It anticipates a growing need for innovation in social service provision and advocates that mutuals are well-positioned to address those challenges.

One of the unique virtues of the public service mutuals sector derives from the re-investment of any revenues they might generate.

As the White Paper notes, this:

“Enables PSMs [public service mutuals] to address some limitations of public service delivery by government, for-profits and community service providers.”

Our experience with more traditional ways of funding and delivering services has revealed a level of performance that falls well short of perfection.

And it is our task as a Government to assess past policy failures with honesty and humility, to diagnose their causes and prescribe new means of doing what has to be done – only better.

Yet if we are to have any hope of achieving that goal we must foster a policy environment that rewards innovation and out-of-the-box thinking.

We must convince the Australian people that the ‘tried-and-true’ will not be adequate to deal with the social and fiscal challenges posed by an ageing population.

The White Paper talks about how “scaffolding” can help to realise the full potential of public service mutuals.

By this it means providing appropriate support structures for the co-op and mutuals sector.

These could include enhancing access to learning or promoting collaboration through mentoring, peer support and the use of expert knowledge.

This White Paper also compared co-operatives and mutuals in Australia and other countries, noting the difficulties our sector faces in the creation of new bodies or the expansion of existing organisations.

Australian co-operatives and mutuals have more complex legal and governance structures than other corporate entities and businesses.

To address this issue the White Paper recommends that an integrated set of resources and support services be established to support the creation and expansion of public service mutuals.

And as organisations achieve a self-sustaining level of operation this scaffolding could then be removed.

This recommendation also notes the importance of the sector’s engagement with the new National Centre of Excellence for Civil Society that the Government intends to launch in the months to come.

The White Paper also discusses relates to the creation of a supportive regulatory environment for the growth of public sector mutuals.

It points to the experience in the United Kingdom, which has been an exemplar in this regard.

In Britain, civil servants empowered to direct the provision of social services to employee-owned public service mutuals.

Through a combination of appropriate regulatory structures and well-designed public policy the public mutuals sector in the UK has gone from strength to strength.

The White Paper proposes that a bi-partisan committee of Parliament be established with terms of reference to consider how similar policies might facilitate the growth of public sector mutuals in Australia.

The White Paper’s calls for the opening of discussions over funding arrangements for public sector mutuals.

Such a discussion would encompass the consideration of specialised funding streams as well as access to mainstream capital resources.

In conclusion I would like to congratulate the Council for the work that went into this White Paper.

The merit of many of its proposals is self-evident.

The BCCM is being supported by public funding to develop “Pathfinder Case Studies” of Australian co-operatives and mutuals which deliver social services.

And as we see here today, it’s money well spent.

I look forward to seeing the fruits of this work.

Thank you very much for what you have done, what you do and what you will do in the months and years to come.