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Mutuals best placed to deliver public services

Author: Peter KhouryDate: 04 September 2014

Australia should replicate the European trend of turning to Mutuals and Cooperatives to deliver services traditionally provided by Government such as disability, employment and healthcare services, according to Australia's largest Mutual - the National Roads & Motorists' Association.

The NRMA has used its submission to the Business Council of Co-operatives and Mutuals Green Paper to put the case to the Australian Government to expand the industry's role in delivering public services.

NRMA Group CEO Tony Stuart will speak to the issue at the launch of the White Paper, A Third Way for Delivering Public Services, in Canberra on 4September.

The NRMA Green Paper submission points to recent trends in the United Kingdom and Europe where community based Mutuals and Cooperatives expanded into public services traditionally provided by the centralised Government, including job seeking programs, housing, community health and disability services and some local emergency services.

The NRMA submission outlines that the 2014-5 Federal Budget identified the need for saving measures in many areas of public service expenditure and the Commission of Audit made recommendations about outsourcing some public services.

Its proposal states that Mutuals would seek to provide these services in support of, and not as a substitution to, the overarching role of Government.

Mr Stuart said that while the European experience was borne out of necessity due to austerity measures following the Global Financial Crisis, Australia's path could be to achieve maximum value for service delivery at reduced cost to the public purse.

"Mutuals like the NRMA were created to deliver high value services to Members in a cost efficient way - if they couldn't meet this ethos they wouldn't survive - so it's about time Australia looked to get maximum benefit from this unique corner of the nation's business community," Mr Stuart said.

"The unique role of Mutuals in the national economy may often get overlooked but the strength of the industry is indisputable - eight in 10 Australians belong to a Mutual and there are almost twice as many Australians who hold membership in a Mutual than invest in the stock exchange.

"One only needs to look at the NRMA's history to understand the benefits that could be achieved for the sector, the government and clients of public services if the proposal outlined by the NRMA is adopted.

"An organisation that began in 1920 as a lobby group for motorists developed a model for service delivery that now sees it offering a raft of Member benefits across roadside assistance; travel, car servicing and car rental and we continue to provide these services effectively today.

"Rather than seek to create share value for shareholders, Mutuals like the NRMA aim to deliver shared value for its Members and the community, this means the profits of Mutuals are invested back into the community and our industry has historically done this very well in Australia.

"The NRMA believes that this is exactly the type of model that Australia should look to when seeking to deliver public services in a more efficient and cost effective way."

The NRMA Green Paper submission highlights that the Australian Government's soon-to-be-created national Centre of Excellence to replace the Charities and Not-for-Profit Commission is the ideal place to give more focus to how Mutuals can deliver economic and social value.

"Any push to increase the role of Mutuals in delivering social value must start with the Australian Government and it should begin by focussing on removing any potential barriers to entry," Mr Stuart said.

"This includes the need to find innovative ways to ensure the necessary start-up and working capital can be sourced, support in establishing public service Mutuals and the necessary mentoring and guidance, if required, so that services can begin to deliver value to the community as quickly as possible.

"There are international examples of how this has and hasn't been done well and Australia would be well served to learn from those who have gone before us."

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