Business co-operation a boost for PM’s modern manufacturing strategy

01 October 2020

The Business Council of Co-operatives and Mutuals welcomed the Federal Government’s announcement of their Modern Manufacturing strategy this morning, with a particular focus on fostering collaboration across businesses and industries.

BCCM CEO, Melina Morrison said a co-operative approach is undoubtedly the most efficient and sustainable way to reinvigorate Australian owned manufacturing interests.

“Manufacturing co-operatives are owned and led by their independent business members. They bring together local industry to scale and grow strong, sustainable businesses that distribute returns to members and the local community,” said Morrison.

“Australia’s small and family owned businesses are an untapped resource which can be leveraged to create local economic prosperity whilst competing on a global stage. They simply require the business infrastructure to do so. Across the world, mid-sized businesses are seen as significant engines of economic growth, domestically owned and controlled, and benefitting local economies. Australia’s economy is characterised by a much larger proportion of SMEs than many other countries.

“Co-operatives and mutuals can provide a significant contribution to the growth of medium and larger-sized business. You can see this in action in NSW Hunter Valley Region. Hunternet is a co-operative born through the economic and industrial upheaval of the early 90s and now involves over 150 companies that bid and win contracts for national and international infrastructure, defence, mining, transport and advanced manufacturing.”

Tony Cade, CEO, HunterNet Co-Operative Limited said, “HunterNet applauds the Federal Government’s initiative to support manufacturing. The HunterNet Co-op supports a network of 150 companies that employ over 70,000 employees nationally. Further, these companies are active in the six priority areas outlined by Prime Minister Morrison. Of particular focus is defence and boarder protection.

“For many years, manufacturers (in particular SME’s) have recognised the need to access global supply chains. With lower energy costs, long term investment in innovation and diversification, and enhanced regulation we will develop a very real competitive advantage.”

BCCM is well-positioned to deliver the infrastructure needed to replicate this success, Morrison said, continuing: “As the Prime Minister recognised, there are many regions that could benefit from this investment, given the correct application. BCCM have presented a plan to for the Federal Budget that focuses on a co-operative led recovery to scale local manufacturing businesses and create high quality jobs in regional centres as well as export opportunities from scaling.

“Our plan focuses on facilitating existing co-operative clusters to work together to deliver jobs and growth and raise their own finance to invest.

“We know that grants to incentivise new business activity do not deliver the sustainable results that incentivising self-help can. Grants can also disadvantage smaller players in the market trying to compete fairly.

“As the peak body for Australian co-operative and mutual businesses, BCCM is proposing to work closely with the Government to improve the business environment for co-operatives so that a new generation of SMEs can work together on advanced manufacturing opportunities.

Jamie Higgins, CEO of SA-based Master Butchers Co-operative Ltd said, “Master Butchers Co-operative is a classic example of how co-ops can support businesses to collaborate and engage in new manufacturing and export activity. The co-op of 450 member businesses, employs 120 people and generates revenue in excess of $70m through food manufacturing and waste recycling activity that independent SME’s would struggle to access alone.”

“We already compete in global markets but better regulation, access to capital for upgrades and efficiencies and lower energy costs will bring forward our growth plans and expansion strategy”

Co-operatives and mutuals present an opportunity to increase Australian ownership of supply chains that align with the national interest.

“As producers in an export dominated state, our growers are extremely reliant on the logistical supply chain and marketing arm to realise value for their grain in our international markets,” CBH Chief Executive Officer Jimmy Wilson said.

“The certainty provided by having ownership and control over the very supply chain that creates value for their commodity is not just important, it is essential.”

Ms Morrison said, “The pandemic has demonstrated that when all Australians work together with a common goal, we can achieve some great things. As we re-build Australia, co-operatives and mutuals will help rebuild local economies and local communities together with a common purpose – creating jobs, growing businesses and sharing returns.”

Download the pre-budget submission.