Mutuals’ Business Model Highlighted in Competition Review

The Federal Government has been urged to heed the findings of the Final Review into Competition Policy by recognising and expanding the role of co-operative and mutual enterprises in delivering public services traditionally delivered by Governments.

The call comes from the Business Council of Co-operatives and Mutuals (BCCM) – the national peak body representing the co-operative and mutual models of enterprise in Australia.

“Public Service Mutuals (PSMs) are an alternative way to deliver social services that is cost efficient, human scale and deliver real choice and control into the hands of users,” BCCM Chief Executive, Melina Morrison said.

“The Harper (Competition Policy) Review has recognised the potential for PSMs to play a greater role in meeting individual and community needs, possibly in conjunction with other significant Government initiatives including the National Disability Insurance Scheme (NDIS).

“As businesses owned by or on behalf of members rather than shareholders, PSMs address many of the concerns raised about a race to the bottom on price and quality that might occur in markets dominated by for-profit bidders.”

The Federal Government commissioned Professor Ian Harper to undertake an independent “root and branch” review of competition policy, said to be the first comprehensive review of Australia’s competition framework in more than 20 years. The Competition Policy Review’s Final Report makes 56 recommendations for reforms across three key themes: competition policy, laws and institutions.

BCCM said one of the recommendations in the Harper Review was based on the findings of the its White Paper on Public Service Mutuals published in late 2014.

“The Competition Policy Review said Public Service Mutuals now play a significant role in some other jurisdictions, including the UK where there has been concerted effort through public policy levers and capacity-building activities to establish and expand public service mutuals,” the Review said.

“As user needs and preferences continue to evolve, public service mutuals could play a greater role in meeting individual and community needs, possibly in conjunction with other significant government initiatives. Indeed, the White Paper suggests that NDIS trial sites could prove ideal for piloting a disability staff co-operative.”

“The Competition review has picked up on our concerns about systemic risk to diversity and competition if for-profit providers ‘cherry pick’ lower risk markets or more profitable consumers,” Morrison said.

“Co-operatives and mutuals are already widely used in delivering human services. They deliver a range of services from childcare to health care, aged care, disability employment, affordable housing, education, health insurance, motorist care and home assistance to an estimated 13.5 million members across Australia. They deserve a greater focus of Government attention given the benefits they offer to communities, individuals and taxpayers.”

The BCCM said it convened a national Public Service Mutuals Taskforce, chaired by Gillian McFee and supported by mutuals including NRMA, HCF, RAC WA and Australian Unity, to oversee its campaign for greater recognition of the role of mutual providers of public services.

An upcoming Senate inquiry into the role of CMEs in the Australian economy is expected to examine the benefits of mutual ownership of public services.