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HunterNet Co-op ‘a model for regional Australia’

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The “missing middle” of the economy deserves a boost in the next federal budget, a peak body says.

Particularly in manufacturing and finance, seed funding to grow medium and larger-sized enterprises could generate both economic and social gains, the Business Council of Co-operatives and Mutuals (BCCM) said on Monday.

“People and businesses have been moving to the regions as a result of the pandemic,” BCCM chief executive Melina Morrison said.

“It will be important to lock that value in for the benefit of the regions where the growth is taking place.”

Community-owned enterprises could also be the answer to supply chain problems thrown up by the pandemic, she said.

The co-operative model is an alternative economic development strategy that isn’t used enough in Australia, according to the budget pitch for a well-funded “Thriving Regions” program.

Australia could aspire to Germany’s mid-sized business sector, the “Mittelstand”, or an Australian version of the successful co-operative business clusters in Italy’s Emilia Romagna or Spain’s Basque Region.

The HunterNet Co-op, an industry cluster of small and medium enterprises, has played a significant role in Newcastle’s manufacturing base and could be a model for regional Australia, the peak body said.

The co-op structure is the “secret sauce” with members benefiting from access to group training, networking, advocacy support and joint bidding on contracts that are too large for any single firm.

“Filling in the missing middle of Australian manufacturing can be achieved through co-operatives,” Ms Morrison said.

Since forming around the time of BHP’s departure from Newcastle and significant economic upheaval, HunterNet now represents 200 member businesses with a combined 70,000 workers across manufacturing, engineering and defence industries. 

It has combined revenue of more than A$80 billion.

Another example in the budget submission is a co-op formed on the Fleurieu Peninsula of South Australia to re-open a mothballed local abattoir. 

Unlike traditional agricultural co-ops, the co-op will be owned jointly by workers, wholesale and retail customers and primary producers.

The co-op is seeking to raise $1.2 million from members using so-called Co-operative Capital Units to re-open the abattoir and build a “paddock to plate” brand.

More regional co-ops can generate private investment with access to the right technical support and business advice, the peak body says.

The government’s target of a $100 billion agricultural sector by 2030 would also be more achievable with a thriving co-operatives sector and its “multiplier effect” in the regions, the submission added.

The peak industry body represents more than 11 million individual members, including 60,000 businesses.

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