CME response to COVID: The Hon Scott Farlow speech

18 March 2021

Yesterday’s 2021 BCCM Leaders’ Summit commenced with the Breakfast on the Hill at NSW Parliament where the contribution of CMEs through COVID-19 was recognised by the Parliamentary Secretary to the Treasurer and for COVID Recovery, The Hon Scott Farlow.

Read The Hon Scott Farlow’s speech about CME response to COVID in Hansard on Wednesday, 17 March 2021.

The Hon. Scott Farlow (24:24):

Tonight I draw to the attention of the House the contribution of the Business Council of Co-operatives and Mutuals throughout the COVID-19 pandemic. The Business Council of Co-operatives and Mutuals commenced their CEO Leadership Summit today in this place. More than 600 co-ops are registered throughout New South Wales and the contribution of the top 10 New South Wales co-operatives and mutuals is $7.3 billion to the New South Wales economy. Co-operatives and mutuals have done a stellar job in helping New South Wales and Australia through the last 12 months, supporting their members and communities including through maintaining services at a consistent level and quality—whether that has been the 24,000 farmers across Australia who kept food on our plates, like the North Coast Fresh Food & Cold Storage Co-operative Company Ltd [NORCO] and the Casino Co-Op; the co-operatives and mutual enterprises [CMEs] in financial services that provided relief for their members as they fell on hard times, like the IMB Bank and the Credit Union of Australia [CUA]; mobility and tourism businesses like the NRMA; and businesses that deliver consumer‑centred health, particularly through health insurance providers such as the Hospitals Contribution Fund of Australia [HCF], or businesses that deliver assistance to disability and aged care services, and manage affordable housing for the vulnerable.

Our co‑ops and mutuals throughout New South Wales have been there for their members and their communities. Eight in 10 people in Australia are members of co-ops and mutuals, which have more than $1.06 trillion in gross assets, with a combined turnover of nearly $100 billion. CMEs have a different purpose to investor-led businesses and are 25 per cent longer lived. We have seen their different approach throughout the pandemic in how they have helped members. Here are a few stories of how CMEs have been able to help their members and their communities throughout the pandemic. HCF, which is a name I am sure is known to all, redeployed staff into a hardship team to look after their members. The team provided packages of support for members valued collectively at around $100 million. HCF also redeployed its staff to man the phones for mental health checks for their members. The hardship measures of HCF have been more than twice others in the market, providing approximately 75,000 people with health coverage for up to six months for zero premium if they are in a hardship situation.

The NRMA made 20,000 cars from its Thrifty business available to health workers and redeployed their contact centre staff to call people in quarantine by working with Red Cross and Lifeline to provide vital mental health support, and made welfare calls to all members living alone. In addition, the NRMA provided housing in hotels and holiday parks for the homeless, or housed people from domestic violence situations. Throughout the past 12 months, we have seen lots of changes in the environment and in the market. For example, the Northern Co-operative Meat Co, which is now known as the Casino Food Co-Op, has pivoted after losing 10 per cent of its business from the Chinese export market yet has been able to increase profit during this time and provide more benefits for their members and vital communities in the northern part of the State. With our eyes turned north, we look to a company like Norco, which is another famous name. Norco was financially impacted due a reduction in demand for products to key customers, such as restaurants, cafes, bakeries and hospitality venues. Overnight Norco lost a key part of its market but the milk was still flowing.

Despite the setbacks, Norco was able to pivot and work on acquiring new customers and delivering on the increased consumer demand across other channels, such as grocery and independent retailers. Norco diversified its branded offer and launched into the ice cream segment with a new brand of premium one-litre ice cream products called Hinterland. The launch was supported by Woolworths, which stocked the range in over 900 stores nationally. That resulted in Norco increasing the milk price paid to farmers by $17.1 million during the 2020 financial year and beginning the 2021 financial year with the highest opening farm gate milk price in Norco’s 125-year history. We have seen that through the work of co-ops and mutuals throughout New South Wales they have been able to respond to the COVID-19 pandemic, provide for their members and provide for our communities. We thank them very much. I wish to thank personally the Business Council’s CEO, Melina Morrison, who has been helping with our COVID response in New South Wales through the Business NSW consultations with NSW Treasury. I commend all of the co-ops throughout New South Wales for the fine work they have done in helping us with our COVID response.