Melina Morrison

The Business Council of Co-operatives and Mutuals (BCCM) said it welcomed the ongoing support of the Victorian Government as the sector seeks to expand its economic impact in key sectors such as housing, health, energy, retail and agriculture.

Speaking at the BCCM and Australian Unity “Icons” luncheon on Tuesday to mark the formal launch of the United Nations International Year of Cooperatives in Victoria, BCCM Chief Executive Melina Morrison said the success and innovation displayed by co-ops and mutuals in Victoria has been underpinned by the Victorian Government’s commitment to reducing red tape and improving the overall regulatory environment.

“The regulatory settings now in place including the new myCAV system will allow Victoria’s 581 co-ops and mutuals to make an even greater contribution to a more competitive and productive economy,” Ms Morrison said.

The Victorian Government has invested in a modern online portal, myCAV, for co-operatives which went live on 27 May this year. This enables Victorian co-operatives to more easily and quickly apply for and maintain their registration and related transactions with Consumer Affairs Victoria.

The new myCAV system supports co-operatives to get on with focussing more on their core business and contribution to the Victorian community and economy, and less time on administrative functions.

“Co-operatives and mutuals are trusted social businesses, based on values of solidarity, democracy and self-help,” Ms Morrison said.

“Our sector shares with Labor the goal of a sustainable economy that works in the interests of ordinary people. The International Year of Cooperatives 2025 is an excellent time to reflect on this alignment and the diverse application of co-ops and mutuals across Victoria,” she said.

Ms Morrison said the BCCM’s latest National Mutual Economy Report (NME), revealed continued resilience by the sector against a backdrop of on-going global volatility. The top 100 co-operatives and mutuals posted revenue of $47.7 billion in the year to June 30, 2024, a rise of 8.4 percent. Total revenue in Victoria stood at $8.7 billion with total membership of 4.36 million and direct employment of 26,100.

“The co-op sector has made impressive gains in Victoria over recent years, playing a key role in diversifying the housing industry through enterprises such as  Common Equity Housing Ltd which provides a secure and affordable form of tenure for residents while mutual banks such as Bank Australia, Bank First, Defence Bank and Bank Vic are focused on providing financial and mortgage support for thousands of Victorian essential workers,” she said.

She also said BCCM members such as Australian Unity are prominent in the health and social care sectors with a commitment to putting care recipients at the centre of their operations, providing aged care and retirement living to more than 4,000 people. Australian Unity is also the largest home care provider in Australia, with its Home Health business servicing more than 60,000 Australians.

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Melina Morrison

Australia’s co-operative and mutual sector has ambitions to emulate its UK counterpart’s planned doubling in size, after recording an 8.4 per cent increase in annual revenue.

The latest National Mutual Economy Report (NME), published by the Business Council of Co-operatives and Mutuals (BCCM), shows continued resilience by the sector against a backdrop of on-going global volatility and stabilising inflation.

The top 100 co-operatives and mutuals posted revenue of $47.7 billion in the year to June 30, 2024, up from $44 billion in the previous year.

Total revenue for the sector is now 38.6 per cent higher than in FY 2021, reflecting consistently robust growth during the post-Covid period and laying strong foundations for continued expansion.

“Australia’s co-operatives and mutuals continue to demonstrate their resilience despite challenging conditions both globally and domestically, reinforcing the strength of this under-appreciated business model,” said Melina Morrison, Chief Executive Officer of the BCCM.

“There is enormous potential for the sector to make an even greater contribution to a more competitive and productive economy, given appropriate regulatory settings and support from government.

“Co-ops and mutuals are already delivering positive outcomes for members and their communities in a number of challenging areas, including affordable housing, aged care and disability support services, regional banking and agriculture.

“We look forward to working with government and regulators to position co-ops and mutuals at the centre of the economic and social agenda, similar to the UK Labor Government’s initiative to double the size of its mutual sector,” Ms Morrison said.

Co-operatives and mutuals have shown remarkable resilience in the face of economic headwinds, reinvesting surpluses locally and maintaining service delivery. Government should look to the business model to help stimulate economic growth amongst smaller Australian firms. Sectors targeted for growth like manufacturing and renewable energy could benefit from co-operatives as a vehicle to scale small and medium businesses.

The top 100 features some of Australia’s biggest unlisted companies including West Australian grain handler CBH, health insurers HCF and HBF, motoring groups NRMA, RACQ and RAC as well as health and financial services group Australian Unity.

The mantle of Australia’s largest co-op again went to CBH, which recorded turnover of $4.69 billion.

CBH’s Chief Executive Officer, Ben Macnamara, said the outlook for the agricultural sector remained strong with a growing WA crop size and global demand for grain remaining strong.

“At CBH, we’re seeing the benefits of sustained investment in supply chain efficiency and infrastructure. That said, volatility is a constant in our industry, whether it’s from global geopolitical tensions or market disruptions.

“Despite this, we must continue to innovate alongside our grower members, remain cost-conscious and ensure that we’re delivering value back to our members, not just in strong seasons but in the tough ones too.”

Steve Laidlaw, the chief executive of Australia’s largest customer owned bank, People First Bank, also highlighted the unique challenges facing the sector.

“Increasingly, Australians are turning to organisations that act with integrity, serve a clear purpose and contribute to their communities.

“That presents a real opportunity for co-ops and mutuals, but also a clear challenge. Customers want to bank with organisations that have a social conscience and do good. However, this is not enough, they also need their experiences to be simple and tailored to their needs. We need to meet both of these elements if we are going to continue to succeed.”

The NME report shows that the top 100 managed assets worth $217 billion, up 4.8 per cent on the previous year, while net profit after tax was $1.87 billion.

Co-operatives and mutuals exist for the benefit of their members, which may be customers, staff, suppliers, or a combination of stakeholders. Unlike listed companies, they are not motivated by the need to maximise profits and pay dividends to investors. Instead, they can use surplus funds to reinvest in services and deliver benefits to members. Eight in every 10 Australians are members of at least one co-operative or mutual.

Outgoing Chief Executive Officer of HCF, Sheena Jack, said the mutual model’s strength lay in “putting people before profits”.

“Our members aren’t just customers—they’re the reason we exist. Every decision we make has our members at the centre. Being part of a mutual like HCF means members benefit directly from the value we create, from lower premiums, more generous benefits, better customer service, and access to health programs that support their wellbeing.”

The NME report shows that Australia’s co-ops and mutuals had combined active memberships of 37.3 million during the 2024 financial year, up from a previous 34.7 million.

There was a total of 1834 co-ops and mutuals, directly employing at least 94,400 Australians. This was a slight increase on the previous year, despite heightened merger activity, particularly among customer owned banks, driven by the need to find scale and efficiencies in a competitive banking environment.

Top 10 Co-operative Mutual enterprises by turnover

 
 
That merger activity has continued in the current financial year with Bank Australia and Qudos Bank set to unite in July, while Teachers Mutual Bank Limited and Australian Mutual Bank Limited, and Regional Australia Bank with Summerland Bank, are considering mergers for 2026.

Commenting on drivers behind consolidation, Bank Australia CEO and managing director Damien Walsh said: “Customer-owned banks continue to face common challenges around economies of scale, replacing legacy technologies and growing cybersecurity threats.

“How smaller institutions balance these competing challenges and drive continued improvements in customer experience will be critical to their future success.”

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Melina Morrison

Government and regulators are being urged to help facilitate the growth of Discretionary Risk Mutuals (DRM) as part of a diversified risk protection landscape.

A report released in Canberra yesterday highlights the important role DRMs are playing in providing alternative risk management to businesses and organisations in markets where premiums have become unaffordable.

This includes many communities subject to frequent extreme weather events, but also unique risk environments such as the gig economy and community housing, where a member led solution can drive better pricing, risk management practices and innovative product offerings.

“This is an important benchmarking report that shines a light on a model of risk management that has stood the test of time across hundreds of years and yet is not well understood,” Melina Morrison, chief executive officer of the Business Council of Co-operatives and Mutuals (BCCM) said.

“With bushfire and cyclone seasons on the horizon, it is a timely reminder of the need for innovative solutions, including business model diversity, to ensure all Australians can manage their risk effectively and strengthen community resilience.

“While not a panacea, discretionary risk mutuals can provide diversity but we need a policy environment that allows this important sector to flourish.”

The report, commissioned by the BCCM in conjunction with law firm Hamilton Locke, provides the first snapshot of Australia’s discretionary risk mutual sector.

DRMs are owned by their members, who pool resources to fund their own coverage. They are usually set up by a group of businesses or individuals with a common purpose, risk profile and similar protection needs, where traditional sources of insurance may be either unavailable or too costly. As mutuals, they are required to put the interests of their members first.

In a DRM, members have a right to have their claim considered but, unlike insurance, do not have a contractual right to indemnity. Claims are considered at the discretion, usually of the DRM board or management but there is no right to cover. When combined with the member-first purpose of a mutual, this flexibility can be used for the benefit of the members.

According to the report, there are 50,000 Australian businesses, organisations and individuals using DRMs with combined contributions of $370 million to manage their risk.

The biggest DRMs include Capricorn Mutual, Unimutual, CivicRisk Mutual, Peninsula Mutual and Our Ark Mutual.

“The exit of some insurers and a reduced appetite to insure individuals and businesses for certain risks is driving the creation of new discretionary mutuals,” the report said.

Innovation is listed as another key driver of growth in the sector.

“Innovative, flexible and tailored products can be offered to members where insurers are slower to innovate,” the report said.

Among the biggest users of DRMs in Australia are small businesses, local governments, educational institutions, pilots, faith-based organisations and social care service providers.

According to the report 87.5 per cent of Australia’s DRMs reported growth in membership over the past year and all of those surveyed reported growth in contributions. Two thirds of the DRM’s surveyed delivered a surplus for members last year.

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