marginalised groups , and create fair , stable employment opportunities .
4 . Progressive procurement of goods and services to ensure social , economic and environmental value is being maximised .
5 . Social productive use of land and property to add social value .
EXPANDING PLURAL OWNERSHIP OF WEALTH By definition , SMEs , local businesses , cooperatives , and employee-owned businesses are rooted in local economies and provide local employment opportunities .
The Business Council of Cooperatives and Mutuals ( BCCM ) found there were more than 2031 co-ops and mutuals ( CME ’ s ) in Australia in 2020 , with a combined active membership of more than 31.1 million people and a combined turnover of $ 35.3 billion ( BCCM 2021 ). The cooperatives operate in almost every sector , with the highest number in financial services , health insurance , agribusiness , mobility services , retailing , medical services , health services , purchasing services , wholesaling and utilities .
The BCCM ( 2021 ) identified three key characteristics that make co-ops and mutuals sustainable contributors to economic and community life :
• they can take a more patient , long term view of growth , unlike listed firms who need to maximise short term profitability . In the banking sector , this is reflected in relatively low levels of loan defaults
• the balance sheets of cooperatives and mutuals typically carry less debt than shareholder-owned businesses , and
• the ‘ mutual mindset ’ – a focus on members and the community – seeks to deliver value to their core stakeholders despite adverse economic conditions .
While the BCCM promotes the cooperative sector , this sector is almost invisible in economic development strategies and state and federal government policy .
At a time when resilience and recovery are front of mind , supporting and encouraging cooperatives , which by definition are social purpose businesses , fosters local employment and creates opportunities for ethical investment . As the investing community is increasingly concerned with their total investment impact , CME ’ s provide an attractive local investment proposition .
We are also seeing a rebound from the 1990-2000 ’ s era move to outsource everything with a shift back to insourcing and where it makes sense , bringing services back in house . Previously outsourced activities could be a focus for cooperative enterprises , rather than necessarily becoming local government enterprises .
MAKING FINANCIAL POWER WORK FOR LOCAL PLACES Access to credit is critical for many small businesses ; however , the banking sector typically focuses on national or global markets rather than local investment . CWB recognises there are opportunities to redirect savings , pension funds and superannuation for local investments . This starts by supporting credit unions and community banking .
Small businesses have long reported they find it challenging to access finance ( Connolly and Bank 2018 , as in Lewis & Liu 2020 ). In general , they find it harder than other borrowers to access finance due to their relative risk profiles . Research by the Reserve Bank of Australia in late 2020 found banks were cautious about lending to new customers and to sectors significantly affected by the pandemic , such as smaller retailers , tourism and commercial property . For local economies , the ability to access finance is critical . Credit unions and community banks are more likely to work with local businesses and evaluate loans based on an in-depth knowledge of the local economic context .
Small businesses have long reported they find it challenging to access finance ... Research by the Reserve Bank of Australia in late 2020 found banks were cautious about lending to new customers and to sectors significantly affected by the pandemic , such as smaller retailers , tourism and commercial property .
Australia has a strong credit union sector and some community banking initiatives , such as Bank Australia which is a cooperative and Great Southern Bank , formerly a credit union . There are small examples of ‘ putting back ’ from the banking sector but much more could be done to harness our savings and super for sustainable local community economic development .
EMBEDDING FAIR EMPLOYMENT IN LOCAL COMMUNITIES Anchor institutions are often the biggest employer in a place . As such , the approach they take to employment can have a defining effect on a local area , such as providing a living wage , good terms and conditions , and stable employment . Targeted employment practices can be used to create opportunities for marginalised groups and disadvantaged communities .
VOL 14 NO 3 2021 20 www . edaustralia . com . au