Abstract
Cooperatives were operating in Australia as early as 1859 and continue to operate across a number of key sectors of the Australian economy including primary produce, financial services and consumer markets. Cooperatives make a significant financial contribution to the Australian economy. In April 2011, the top 100 cooperatives in Australia had an annual turnover of $14.77 billion with 13,085,000 members and 26,000 employees. However, Australia initially struggled with the regulation of cooperatives. Prior to state legislation being passed in the 1920s, cooperators were forced to register their organizations as limited companies, as the regulation of commercial entities was framed in a way that promoted capitalistic enterprise rather than cooperative effort. As a result, Federal and State legislatures have passed laws that have attempted to distinguish cooperatives from more traditional corporate forms. Achieving this goal has been somewhat problematic as government policy toward the regulation of cooperatives has been “ambiguous” at best. Historically, there does seem to have been some general public policy support for the effective regulation of cooperatives. Indeed, parliamentary debates have recorded legislators arguing that, “the great improvement of our [Australia’s] economic condition lies in the development of the cooperative enterprise.” However, Wickremarachchi suggests that this early enthusiasm for cooperatives was short lived due to an underlying public policy agenda that has promoted “for-profit” forms of organizations. This argument seems to support earlier observations made by Lyons who argues that Australian society has had a tendency to emphasize individualism and consumerism rather than the pursuit of cooperative ideas, thereby marginalizing the role of cooperatives in Australia.
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Notes
- 1.
MacPherson (2005).
- 2.
Cooperatives Australia (2012).
- 3.
For example in New South Wales (NSW), the Building and Cooperative Society Act 1901 (NSW) was used to regulate cooperatives in rural community settlements, rural building, rural credit, urban credit and rural investment. In Queensland, the Primary Producer’s Cooperative Associations Act 1923 (QLD) was passed in order to accommodate the heavy reliance this state had on primary production.
- 4.
Lyons (2001).
- 5.
See NSW Gazettes 1920-ff.
- 6.
Wickremarachchi (2012).
- 7.
See above footnote 4.
- 8.
For more information on the ICA’s notion of cooperative identity see http://www.coop.org.
- 9.
See for example s. 6, Cooperatives Act 1992 (NSW).
- 10.
See Section 51(xx) of the Australian Constitution. For some discussion on the types of activities relating to a trading corporation see for example New South Wales v Commonwealth (2006) ALR 1. More generally, Australia utilises a combination of both Federal and State laws to regulate various matters. Historically, the Australian Constitution established at the time of Federation in 1901 identified the various matters that Federal parliament could legislate on (including the activities of certain commercial enterprises). If a particular matter was not within the scope of these various heads of power listed in the constitution then particular States were left to regulate the matter. This intersection between Federal and State laws attempted to reconcile the competing interests of ensuring Australia could operate as a Nation as well as the fiercely held belief that each particular State should retain the capacity to regulate affairs and activities within their geographic boundaries due to strong notions of Federalism that continue to influence modern day interaction between Federal and State parliaments. The various heads of power which the Federal government rely on to pass laws can be found at: http://www.austlii.edu.au/au/legis/cth/consol_act/coaca430/s51.html.
- 11.
See Corporations Act 2001 (Cth) section 30ff.
- 12.
For a more detailed discussion on the ‘hybrid’ nature of cooperatives see van Bekkum and Bijam (2006).
- 13.
Edgehill (2008).
- 14.
For more information on provisions pertaining to unfair practices and fair trading, see the Australian Consumer Law Act 2010 (Cth), Chapter 3, Part 3-1.
- 15.
See above footnote 13.
- 16.
See the proposed National Cooperative Bill 2012 (NSW), ss. 18–19. The complete Bill can be found at: http://www.legislation.nsw.gov.au/bills/docref/94e2b495-7b05-4989-f0ab-d88fc3025180.
- 17.
Ibid., ss. 3(b), (d).
- 18.
Ibid., section 10.
- 19.
Balnave and Patmore (2009).
- 20.
Entwistle (1952) at pp. 3–4.
- 21.
See above footnote 16, Part 3.4, Division 2.
- 22.
CACs first appeared as community advancement societies (clubs, ski lodges, bus services) in New South Wales following the enactment of Cooperative legislation in 1923. Community advancement societies/cooperatives did not appear in other States until 1953 in Victoria, 1967 in Queensland and 1983 in South Australia. For further information on CACs see http://www.socialtraders.com.au/sites/www.socialtraders.com.au/files/Cooperative%20Social%20Enterprises%20Info%20Brief.pdf.
- 23.
For more information about the impact of this retail cooperative, see Sydney Morning Herald, 20th February 2012.
- 24.
For more information on activity of community cooperatives see, Australian Bureau of Statistics (1301.0) (2012).
- 25.
See above footnote 16, Part 3.4, Division 1.
- 26.
Ibid., Part 3.1, Division 4 and Part 3.3.
- 27.
Ibid., section 149.
- 28.
Cooperatives Australia National Report 2011 available at http://www.australia.coop/ca/index.php/articles/publications.
- 29.
Wickremarachchi and Passy (2012).
- 30.
Lewis (2006).
- 31.
For a more detailed summary of the provisions relating to the raising of capital by distributing cooperatives see ss. 347–350 of the National Bill.
- 32.
See above footnote 16, Part 2.1, Division 1, section 38.
- 33.
See above footnote 11, section 117(2).
- 34.
Income Assessment Tax Act 1997 (Cth), ss. 117–120.
- 35.
O’Connor and Thompson (2006).
- 36.
See above footnote 16, section 110. For information on the incorporation of the “one member-one vote” principle, see Part 1.3, section 10 of the National Bill.
- 37.
Ibid.
- 38.
Ibid., section 148.
- 39.
See above footnote 30.
- 40.
See above footnote 16, ss. 156 and 158.
- 41.
Mellor et al. (1988).
- 42.
Ibid.
- 43.
See above footnote 16, section 76(4).
- 44.
Ibid., section 77 (1–3).
- 45.
Ibid., section 78-ff.
- 46.
Ibid., section 99 (a–c).
- 47.
Ibid., sections 345–359.
- 48.
Ibid., section 345.
- 49.
Ibid., section 353.
- 50.
Ibid., section 354.
- 51.
See http://www.asx.com.au/governance/corporate-governance.htm for updated governance principles including 2010 amendments.
- 52.
Ibid., ss. 172–173.
- 53.
See above footnote 41.
- 54.
See above footnote 4.
- 55.
See above footnote 16, ss. 484–485.
- 56.
Ibid., Chapter 6, Part 6.3.
- 57.
See above footnote 16, ss. 173–175.
- 58.
Ibid., section 192-ff.
- 59.
See above footnote 35.
- 60.
Ibid.
- 61.
See above footnote 16, section 212.
- 62.
Ibid. at section 214.
- 63.
Ibid. at section 252-ff.
- 64.
For a more detailed listing of financial statements required to be presented at annual meetings see above footnote 16, Chapter 3, Part 3.3.
- 65.
See above footnote 16, Part 2.1, Division 2.
- 66.
Ibid., section 25.
- 67.
Ibid., ss. 26–27.
- 68.
Ibid., section 28.
- 69.
Ibid., section 35 (1–6).
- 70.
Langdon (1994), pp. 142–155.
- 71.
This remains the primary focus of ss. 117–120 of the ITA.
- 72.
See above footnote 4 at 10.
- 73.
Cooperative Council of Australia, National Cooperative Conference Report 1998 available at http://www.coopdevelopment.org.au/nationalcoopconference.html.
- 74.
See above footnote 30 at 338.
- 75.
Cooperatives Council of Australia (1998).
- 76.
See above footnote 30 at 380.
- 77.
See for example Cooperatives Act 1992 (NSW), section 396(E).
- 78.
References
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Cooperatives Council of Australia (1998) Cooperatives – Australians extending their own business: submission to the review of business taxation from the Cooperatives Council of Australia Inc., 27 December 1998
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MacPherson I (2005) Cooperative identity in cooperatives managing change into the 21st century. In: Collated papers from key issues conference (KIC), NSW Registry of Cooperatives, Sydney, 2005
Mellor M, Hannah J, Stirling J (1988) Worker cooperatives in theory and practice. Open University Press, Milton Keynes
O’Connor J, Thompson G (2006) International trends in the structure of agricultural cooperatives: A report for the Rural Industries Research and Development Corporation, Publication No. 01/06, Project Numbers IMS-2A and GLL-IA, 2006
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van Bekkum OF, Bijam J (2006) Innovations in cooperative ownership: converted and hybrid listed cooperatives. Business paper presented at the 7th international conference on management in agrifood chains and networks, Ede, 31 May–2 June 2006
Wickremarachchi J (2012) New cooperatives: motivations and barriers prepared by The Australian Centre for Cooperative Research and Development (ACCORD), presented at Charles Sturt University. Found at http://www.accord.org.au. Accessed 3 May 2012
Wickremarachchi J, Passy A (2012) State of the sector: NSW cooperatives 1990–2000, The Australian Centre for Cooperative Research and Development (ACCORD), presented at Charles Sturt University. Found at http://www.accord.org.au. Accessed 5 May 2012
Further Reading
Cooperative National Law Bill 2012 (NSW).
Income Tax Assessment Act 1997 (Cth).
Acknowledgments
I would like to pass on my sincere appreciation to Suzanne Fawcus, Research Associate, Faculty of Business and Economics, Discipline of Marketing and Management, Macquarie University, who assisted in gathering and editing material used in the crafting of this chapter.
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Sarina, T. (2013). Australia. In: Cracogna, D., Fici, A., Henrÿ, H. (eds) International Handbook of Cooperative Law. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-30129-2_8
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