Unlocking the potential of co-operatives and mutuals in Australia’s social economy

13 August 2025

A new report from the Centre for Social Impact (CSI) has delivered a clear message: Co-operative and Mutual Enterprises (CMEs) are a powerful but underutilised part of Australia’s social economy, with enormous potential to drive positive social and economic outcomes – if the right policy, recognition and awareness measures are put in place.

Part of a bigger picture

The inaugural State of the Social Economy in Australia report identified five major insights across all Social Economy Organisations (SEOs). While the findings span the whole sector, several directly relate to CMEs: 

• Access to funding and diversification – Funding remains the top priority and risk for SEOs, yet most have not explored new financing models. CMEs, while often less reliant on grants and donations, still face constraints in accessing tailored finance. 
• Collaboration valued but under-resourced – SEOs want to work together but often lack the sustained funding and coordination needed to make collaboration effective. 
• Co-operative potential underutilised – Despite high membership rates and strong economic contributions, CMEs receive less focus and support in policy than other social-purpose organisations. 
• Need for resources to measure impact – SEOs report limited funding, tools and frameworks to assess and communicate their social and environmental impact. 
• Lack of consistent regulatory and policy support – Inconsistent recognition and barriers in laws, regulations and procurement processes hold back growth and innovation.

High membership, low visibility

In Europe, only one in three people is a member of a co-operative; in Australia, it’s four out of five. Yet CMEs are less visible in public discourse and are often overlooked in social economy policy, legislation and incentive programs. 

With at least 1,830 CMEs operating nationally, the sector is already contributing to community wellbeing, economic participation and democratic governance. However, according to survey respondents, CMEs are given less focus in government frameworks than other social-purpose organisations. 

One respondent summed it up simply: 
“Very few people know what a co-operative is, and in the social economy, it would be the best structure to use for many reasons. More knowledge of co-operatives would make it easier for us to operate.” 

Why this matters

Co-operatives and mutuals are uniquely positioned to balance commercial success with member and community benefit. Their democratic, member-owned structures allow them to reinvest profits back into their communities, support local economies and foster resilience – attributes that are increasingly critical as Australia faces cost-of-living pressures, climate challenges and social cohesion issues. 

The report identifies the significant untapped potential of CMEs to scale their contribution to the social economy if they receive greater recognition in government frameworks, improved access to incentives and increased public understanding of the model. 

Barriers holding the sector back

The findings point to several barriers preventing CMEs from realising their full potential: 

• Limited policy recognition and support – CMEs are often overlooked in social economy policy, legislation and incentives, reducing opportunities for tailored support, funding mechanisms and procurement access. 
• Low public awareness – While most Australians are members of a CME, understanding of their purpose, value and benefits remains limited. 
• Underutilisation in national strategies – CMEs’ proven strengths as inclusive, democratic business models are rarely embedded in national economic or social development strategies. 
• Funding and collaboration gaps – Like many SEOs, CMEs face constraints in securing sustained funding for innovation, collaboration and capacity building. 
• Impact measurement challenges – Limited resources and lack of standardised tools make it harder for CMEs to demonstrate and grow their impact. 

Strategic recommendations

The report makes clear recommendations to unlock the power of CMEs in building a more inclusive, resilient and sustainable economy: 

• Embed CMEs in national social economy policy and legislation – Ensure equal recognition alongside other social-purpose organisations in laws, regulations and government programs. 
• Increase public awareness and understanding – Promote CMEs through targeted education campaigns, case studies and sector-led outreach. 
• Leverage large membership bases – Harness the reach of CMEs to scale both economic and social impact through coordinated initiatives. 
• Ensure access to government incentives – Include CMEs in social procurement, grant programs and impact investment opportunities. 
• Remove structural and regulatory barriers – Streamline compliance, harmonise fundraising laws, and expand eligibility for tax concessions, certifications and funding to support collaboration and impact measurement. 
• Expand knowledge sharing and financing options – Build sector capability to explore alternative funding models and foster long-term collaboration. 

A call to action

The Centre for Social Impact’s findings present a pivotal opportunity for policymakers, industry leaders and the co-operative and mutual sector itself. By recognising and actively supporting CMEs within the broader social economy, Australia can tap into a model that is already embedded in communities, trusted by members and proven to deliver long-term benefits. 

The BCCM welcomes the report’s identification of the untapped potential of the social economy and emphasis on the critical role CMEs can play, and looks forward to working with government, stakeholders and members to advance these strategic priorities. 

Read the report.