15 NOVEMBER 1995: RICHARD RAXWORTHY TALKING TO ALAN PARRY AT THE CUSCAL CONFERENCE
What is your full name Mr Parry?
AP: Alan Francis Parry
What year were you born?
AP: 1928. In Morwell Victoria.
Did you grow up around there?
AP: Yes, grew up in Gippsland, mainly Yallourn but in the Morwell area. I was there until my early twenties.
You went to school there?
AP: Yes went to high school there. Finished off secondary school in Melbourne for a couple of years, before going down there later on to university.
Did you learn anything about co-operatives?
AP: Well my father was a very keen co-operator, in fact he was a very early Director of a retail co-operative.
Which one was that?
AP: It was called the Yallourn Co-operative Society which ran for about four or five years before it was run out in a price war by a Melbourne-based department store.
Who was the President or Chairman of that co-operative, can you remember?
AP: No I don’t remember the name of the Chairman.
You managed to go straight to university. Did you get a scholarship?
AP: Well I was a student-teacher for a period of twelve months at Yallourn before going to Primary Teachers’ College. Then in turn on to the University of Melbourne.
At the university did you feel at home, or out of place?
AP: Well I felt a need to work with great intensity. I felt the competitive pressures were overwhelming. But I wouldn’t say I was a mature student or that I had been all that well-prepared to handle university life, but managed to stumble through.
One of the things I have been intrigued by, you must have been one of the later student-teachers, that must have disappeared quite early on.
AP: That is fairly close to it. I think they wound up the student-teacher approach to teacher training in about 1950, 1951 in Victoria, so I would have been among the last group of apprentice teachers, yes.
Can you remember anything of university life at that time? Who were your tutors and professors?
AP: Well probably the one that I most readily recall is Jim Cairns, who at the time was a senior tutor in Economic History. A very good tutor too. He is remembered because subsequent to that he became rather prominent in Australian politics. It was a time five or so years after the War and quite a number of the lecturers, particularly the junior lecturers, tended to be younger men who had sampled life outside academia and had quite a lot of give in a broad sense. I couldn’t with any clarity recall individuals, I can remember names but nothing of consequence about them other than the fact that most of them did a medium to adequate job.
What about your co-students, anybody of interest there? Did anybody influence you?
AP: Well I had the problem of being a country boy, still wondering what on earth put a big metropolis university together, so I tended to work rather vigorously and not take all that much part in university activities. It was a time when the Melbourne University Labor Club was a very active left-wing club. This was the part of the political spectrum in which I had most interest, but I tended to be close observer rather than a participant.
Were you politically involved outside the university?
AP: I was for many years a member of the Labor Party to the extent of attending Branch Party Meetings when I was back in Yallourn, not around the Melbourne metropolitan area, keeping faith with my father who while not a political party activist was a lifelong Labor voter. To that extent I retained an interest in politics at that time.
I was talking to Wendy Lowenstein some time ago, I did an interview with her here, and I think she mentioned you at one stage though I can’t remember in what connection.
AP: Well Wendy and I were members of the High School Branch of the Victorian Teachers’ Union. This is well before Wendy made her mark as an historian. We shared many positions, many attitudes, many convictions.
So where did you go to work first?
AP: Well after finishing university I went to Tallangatta in north-east Victoria, where I was for two years. It was a town incidentally that was subsequently flooded after the Hume Reservoir was extended. From there I moved through a succession of schools to Warrigal High School, Sunshine High School back in Melbourne. Spent two years in Canada teaching, which is where I became probably most acquainted with credit unions. Most of my colleagues were in the British Columbia Teachers’ Federation Credit Union and it whetted my appetite. When I came back, not long after I returned, I became involved with a group that did establish Education Credit Union in Melbourne.
Who was in this group?
AP: Des Russell, who is our Chairman and here at this meeting. Olive Nelms was one of them, she is also a present Director. The other three or four were mainly teachers who were also Unionists. Our original aim was to establish a credit union that catered for post-primary teacher Unionists and it had a very narrow bond for a period of time before we opened it up, as inevitably had to happen. Our circumstances changed.
Do you remember the formation meeting, or a Steering Committee?
AP: Yes with great clarity. We had a Steering Committee that ran from about September 1972. We had two or three meetings. We actually formed, our formation meeting was held on 7 December 1972. We were inaugurated as a credit union early in February 1973. The formation meeting was held in the Melbourne High School Hall, attended by fourteen people. If we tried to form a credit union these days with so few there it wouldn’t be allowed under existing legislation.
What was the name in the first place?
AP: Well we tossed around a few names. We tried Sec-Tech, sounds a bit intestinal when you think about it, to indicate the two divisions that were represented in the credit union. Then Ed Credit came up as a name that was generic and even though it was Union-based at a later time might have a slightly more broader appeal to other members of the education community. So we haven’t changed names since 1973.
Can you remember if anybody from the VCCA was involved at the foundation meeting?
AP: Yes indeed. In fact we got most of our earlier assistance from Don Harris, who was very good. Don left at about that time and Leon Magree, prior to Leon moving to New Guinea to take up his job over there, was of tremendous assistance to us.
Once the credit union was formed can you remember the name of the Directors?
AP: Yes I could remember the name of the Directors. They were a Maurice Sevier, Des Russell, myself; Alan Parry, Kelvin Smith, Wally Meddings, Bob Higgs.
What about the lady we mentioned before, was she on that Board?
AP: She came on a year later now that I think about it, in 1974.
Can you remember who was Secretary and who was Treasurer?
AP: Yes, Des Russell, who is now the Chairman of the credit union, was our first Treasurer and the Secretary was an employee, Dorothy Sinnett. Dorothy is receiving a Distinguished Service Award tomorrow night.
I have been trying to interview her for years.
AP: She will be here tomorrow night.
She has managed to dodge me a couple of times. Who was first Chairman?
AP: I was first Chairman. I remained Chairman until the year before last.
Did you give it up or were you pushed?
AP: I like to think I gave it up. I acquired a few other responsibilities, including membership of the CUSCAL Board and also the Australian representative on the World Council. They were a little bit too much to contemplate doing simultaneously. Apart from which, obviously, the credit union was over-ready for a change. It is all very well preaching the need for generational change and then spectacularly doing nothing about it.
I am familiar with that. So the running of the credit union from the first instance, how was it done?
AP: It was done on a shared basis. A lot of the actual work was done by Directors. Indeed at the end of the first year we still would have had one employee only.
How many members?
AP: In the first year we had 400 members. At the end of the second year that had doubled to 800. Then it kept on doubling for a period of time before the rate of growth slowed back a little. Similarly with assets. I remember at the end of our first trading year, which was in March 1973, I think we had assets of $1,200.
How did you collect money? Did you get payroll deductions straight away?
AP: No. We were purged by the Victorian Government, we were very much persona non gratis, mainly because of the activism of the Victorian Post-Primary Unions at the time, the Victorian Secondary Teachers’ Association in particular. So they would not grant a credit union payroll deductions. Their justification for that was that it would be conduited through to the Union as an indirect means of getting subscription deductions done by the Government. So for the first eight years half of our members had no payroll deductions. Our technical teacher members did, but it was done in a very crude way, it was piggy-backed on the way of Union dues.
The VTU, was that started up at that time?
AP: Yes. It was rather interesting, because it started up two months before we did. Neither of us had any idea of the what the other organisation was on about. It reflected the big gap between teacher unions in Victoria at that time.
Did you ever try and merge?
AP: We conduct what I think is a good relationship with the VTU Credit Union and we have in the past had discussions that could conceivably have led to an even closer relationship, but so far nothing has come of them.
So how did you go about running the credit union in the first place? How did you collect the money? How did you operate? I mean one person over a number of schools wouldn’t be much help.
AP: We used to do a little advertising in schools and we used to use bank transfers. After a short period of time we managed to get payroll deduction for our technical teacher members. As far as our high school people were concerned, they simply paid by sending it through the mail or by bank transfers.
Did you have a representative system?
AP: Now we have a very extensive representative system. At the time, we set up a representative system fairly quickly but it was always under-resourced. We really didn’t have the capacity to do it justice early on. We now have four full-time officers who visit every school every year.
What about the Board, where was it drawn from? Was it all drawn from one organisation or one area, or did it spread all over the State?
AP: No a metropolitan Board. Melbourne metropolitan area. I received advice from a Canadian credit union representative in 1971 who had been involved in starting the British Columbia Teachers’ Credit Union. He said, “When you start a credit union concentrate logistically on the metropolitan area, including your Board membership in that restriction. Spread your wings later, otherwise the resources tend to be dissipated in the early times.”
New South Wales Teachers’ must have had that problem. But they were forced into going State-wide because when they applied for payroll deductions from their little area in Hornsby, the Department said they would have to include all the teachers in the State otherwise they wouldn’t give them payroll deductions.
AP: We would have been delighted if the Victorian Government had said that to us. They weren’t prepared to give us payroll deductions for our high school teachers under any conditions. In fact, I did some research some years ago and discovered that the two hundred credit unions that I could identify as having a Government-employee membership base, Ed Credit was the only one where payroll deduction was denied to more than half of its membership.
When you did get payroll deductions how did you go about it? Was it got politically? How was it got?
AP: Well it happened when the Government changed in 1982. So from 1973 to 1982 we ran without direct payroll deductions to any of our members, and with payroll deductions piggy-backed on Union dues to our technical teacher members. When the Cain Government was elected in April 1982, one of the earliest things they did was to give payroll deductions to all our members.
There was one stage in New South Wales Teachers’ when they nearly lost their payroll deductions. They were backing the Union in an argument with the Government. So the Unions were getting their payroll deductions by the back-door so the Government threatened to remove credit union payroll deductions.
AP: I have heard that song before too.
What about people. Who were the main contributors to getting the credit union really moving?
AP: Well it was mainly a group of teachers who were also on the Central Committee of the Victorian Secondary Teachers’ Association. One of the things that a number of us made a decision about was that the Union was asking a lot of its members, particularly in Victoria where a series of Teacher Union strikes took place mainly to attempt to raise the minimum entry standards to teaching. A lot was being asked of our members. They were being asked to man the barricades, forego pay, strike quite frequently with all that it did to their income. Some of us thought it was about time the Union could offer something on the other side of the ledger, in short a little warmth, a little reward for membership. The idea of a co-operative approach through a credit union was what was thought of first.
Did they go into any other co-operative ventures as well as credit unions?
AP: Well there have been several co-operative housing societies. Not from the credit union, but from the Teachers’ Union itself ran them. On the other side of the Teacher Union fence, the Victorian Union had a retail co-operative for many years called White Horse Supplies that traded in a range of household effects.
There are a few like that in Melbourne, there was the old YCW for a few years. That pretty well only does school uniforms now and not going very far. Was there any religious input or was it all Union-political into your credit union?
AP: There was no religious input unless you could regard the degree of commitment that many teachers had to the industrial cause as a form of quasi-religion. The church, the parish organisation, which has been so instrumental throughout Australia, particularly in Victoria, in providing the spark for credit unions played no part in our case.
I suppose you had some Union-backing didn’t you?
AP: Well it can be divulged that one of the two things that the two Teacher Unions did, the Technical Teachers’ Union and the Victorian Secondary Teachers’ Association, was to provide seed-savings of $2,000 each. They were among our earliest depositors. However, when the Government went to war with the Victorian Secondary Teachers’ Association the VSTA had to prematurely withdraw its $2,000 because it needed the money for other purposes. But that was the extent of the support that we got.
Was there any other form of support from the Unions?
AP: Yes the Technical Teachers’ Association of Victoria did provide the means by which our payroll deductions from technical teachers reached the credit union. They had them added to their Union subs and in turn they were split by the Union and sent on to the credit union. That was a very significant level of support.
In the rules was it incumbent on the individual to be a member of the Union before they could be a member of the credit union?
AP: Yes it was. It was a very tight bond. We had spouses in the original rules. We didn’t really widen the generational thing, or increase the generational thing to include others, until much later. In fact it was used by the Unions. The Teachers’ Union shows a significant recruitment as eligibility to join the credit union was a highly-prized feature at that time.
What about the spouses, could they be borrowing members?
AP: Yes. We always had what I would describe as a very progressive view on the question of gender, even to the extent now that four of our Board members are women. Very early on we used to make it very clear that gender would not be a disadvantage, should not be a disadvantage when it came to establishing eligibility to borrow.
You wouldn’t have much to show if you wanted to do it any other way because most teachers I suppose are women?
AP: Took a little while for the level of consciousness that exists now. Even at that time we tended to find that we had fewer women members than we have now. It wouldn’t follow that many of our women members at that time had been teachers. I don’t know, I can’t recall with accuracy, but I would estimate that many of them were the wives of teachers who need not have been teachers themselves.
Your Board members had they any experience outside in credit unions before they came on the Board?
AP: None. Except that there had been an interest in the co-operative model on the part of many of them. In fact I mentioned Jim Cairns before. My earlier interest in co-operation, apart from of course wanting to emulate my father who was very keen on the retail co-operative, was as a result of a series of lectures that Jim Cairns gave on Robert Owen and the early co-operative movement of about that time.
He never gave any lectures on credit unions?
AP: No.
I have pointed out that in spite of the fact that the credit union movement started in Germany, there was a long history of lending societies amongst the Wesleyans and the Methodists. Before that there was the old system that when somebody had their apprenticeship indentures when they became a journeyman the organisation that represented them used to lend them the money to go and set up as a journeyman. When they set up in business they again applied back to their Guild to get the money to set up. That was acting in some ways and they were expected to pay it back. So there was a tradition of the Guilds doing a bit in that way. Nonetheless, you can’t say it was a credit union but it was the basis for co-operation. Now what about your own Manager who was Dorothy Sinnett, how long did she last?
AP: Dorothy was our first Executive Officer, as we called her. She filled that position starting off on a part-time basis. Originally we contemplated that Dorothy could be employed for sixteen hours a month. I can always remember when the first wages’ bill came in, I think I can reveal now it was $60 for a month’s work. There was a collective sharp indrawing of breathe, we didn’t know whether or not we could survive with that very high level of operating expense. Her job very quickly expanded to a full-time job. She filled that position of Chief Executive Officer between 1973 and 1984, eleven years. We were full-time and by that time we had fifty or sixty staff.
What about the running of the actual credit union itself, did it start with ledger cards and progress how?
AP: It started with ledger cards that were accommodated in a blue Omo box. There has been some debate whether it was a blue Omo box or a Wheeties box, I am of the blue Omo brigade. They were underlined each month by volunteers, the minimum balance scored in, the interest written in with ballpoint. I can remember one of the great technological advances that first impacted on us was the first hand-held calculator. It is extraordinary to think that in 1973 they were very thin on the ground. We were using adding machines and log tables.
I think I have still got my original one I bought in a chemist shop. Did you get accounting machines and a computer?
AP: We are a very conservative group so we moved from ledger cards and hand-held calculators to what was laughingly described as a visible record computer. We jumped accounting machines but we were not bold enough to go immediately to computers. So we installed one and then later on a matching Nixdorf Visible Record Computer. It was a hopper-stacked computer with mag-stripes that simply dropped down and was entered that way. Incredibly unreliable, unbelievably vexing, terribly noisy and all-in-all a wrong decision, but nonetheless it was one that carried us through until we went fully computerised.
The Loans Committee were you on that at the start? Was it a complete Board Loans Committee? When did you delegate?
AP: Well we delegated to a Loans Committee for recommendations to be made to the Board about two years after the credit union was formed. We began with the full Board. I can remember the time it took to reach agreement on our first $300 loan. Indeed it was a split vote that determined that we should go to a loan limit of $600, for a while $300 was proposed quite seriously as the upper limit. But the full Board at first, with a Loans Committee from about 1975 onwards.
Can you remember what the first loan was for?
AP: Clearly. I don’t know if I can remember what the very first loan was for, but I can remember that two of our very early loans involved a fellow who wished to borrow the bail money to bail his brother out on the grounds that he was quite sure he was innocent. He was equally convinced that if his brother went to court from a position of being on bail he would be in a better position to defend the charge. Another was with a teacher who had run out of sick leave and was absolutely without income. He lived in an old school house that he was renting and he had tried to get a loan from a bank, unsuccessfully, just to tied him over until he resumed work. One day he had the very terrible unfortunate experience of cleaning parts of the carburettor of his car in the bathroom of his house and his daughter in the kitchen turned on one of those instantaneous gas heaters, I don’t know whether you know them, hot water service. Turn on the water and the water activates the pilot light that lights the flame. The heater was in the bathroom and the whole bathroom went up. He was burned over about 30 per cent of his body. We were able to provide that loan very quickly. It was an experience that I have always remembered as perhaps one of the worthiest ways in which you could ever embark as a new credit union on any sort of lending programme.
What were your first involvements with the VCCA? You joined straight away did you?
AP: Yes we have always been a believer in the collective approach and we were immediate members of the VCCA.
Your involvement, you were on the Board there for a long while?
AP: No I wasn’t, I was on the Board for a very short time actually. I wasn’t on the Board of the VCCA.
Actively involved?
AP: Only to the extent of tending meetings as a delegate, doing a bit of Sub-Committee work. I was only the Board in the VCCA in the lead-up to Project Renewal.
Were you a delegate to AFCUL?
AP: No. My involvement with the federal scene began at the time of the organisation of the World Conference here in 1988. My federal involvement, if you like, only goes back about seven years.
End Tape 1A: 4076 Words: 1 hour 15 minutes
15 NOVEMBER 1995: RICHARD RAXWORTHY TALKING TO ALAN PARRY AT THE CUSCAL CONFERENCE
What about after your Nixdorf computer, what was your main advance after that?
AP: The advance after that was to breakdown, among our staff which numbered seven or eight at that time, reservations they had about going the full computer route. We arranged for all of them to attend quite a lengthy series of evening lectures at Kew High School where familiarisation with computers and the approach to working with computers was very capably handled. When we did, and I just forget the exact year, go on to a full computer program it was the program incidentally that the VCCA ran at the time.
Teledata and CUEDOL?
AP: That’s right. The staff were comfortable enough to jump in at the shallow end without requiring to be led.
How long was that before Teledata folded, short of funds to support it?
AP: Yes, I would say, without checking records, three to four years.
Were you happy with the system?
AP: Yes. Some of our members used to comment on the fact that it printed statements upside down. I don’t know whether you remember, the final balance used to be at the top of the page. It ran from the bottom up. We were quite happy with it.
Some people have told me that in fact it was better than the FCS-GCS software that was around later.
AP: I can’t say I recall that as our experience.
On the Loans Committee side, Credit Committee side, when did you start to delegate to the staff the ability to grant loans?
AP: I would say probably in about the fourth or fifth year of the credit union, may have been a fraction earlier. That delegation was naturally enough capped, limited to loans of a certain maximum amount and loans for a particular purpose. But progressively these conditions were relaxed. It has only been in relatively recent times, the last five or six years, that we have loans referred to the Board only as matters of exception. Prior to that time there were some Credit Committee involvement in the making of the loan. Since we went into top-level management, which we are in now, we tend now to have a Loans Committee that only looks at certain categories of loans. For example, loans in excess of $100,000, loans which the professional staff are not prepared to recommend because there is no outright rejection resident in a member of staff. These are the sorts of circumstances now that hit the Loans Committee.
Did you continue the normal loans methods that began to be adopted from outside in the credit union movement, the point system and all those things?
AP: Yes we developed a very detailed loans procedure. We had a means by which risk assessment could be carried out pretty responsibly quite early in the piece. So much so, the credit union would have one of the lowest rates of doubtful lending of any credit union, partly to do with the nature of its membership of course. Significantly I think it is also to do with the fact that the processes are on very firm ground.
What about premises? Did you start a branch system or did you work from a central area?
AP: No we are one who, dare I say it, anticipated the future by about twenty years. You would have heard yesterday the fact that the move now is towards electronic access and while branches may not disappear they certainly won’t increase in number and will almost certainly decrease. We have always deliberately built up a culture of use involving no branches. We have one office only, in Melbourne, with a very heavy dependence on point of sale, ATMs and on fax.
You are the same as New South Wales Teachers’ in that case.
AP: Not quite the same, they have got a branch.
Well one branch.
AP: Well let’s be literalist about this.
They went and put in those drive-in teller machines which are very popular. Mind you, you can help yourself from the fridge in the Head Office of New South Wales Teachers’ so why would you go and drive in to a branch when you can come in and have a beer and give the kids a soft drink.
AP: I have wondered about that myself. We have never been a multiple branch operation, nor would we intend to be one.
You cover the whole of Victoria?
AP: We do.
You don’t go anywhere else?
AP: We have members in other States. We do lend to members in other States.
You operate as a foreign credit union or always in Victoria?
AP: We have no branches outside Victoria, no office accommodation, but we do operate as a foreign credit union.
So your premises have enlarged I presume since you first started?
AP: The first registered office was my home.
You must have been the Secretary then?
AP: I was the accommodator of the borrowed adding machine and the borrowed ink duplicator, which was in a room under the house so small that to operate it we had to open the door. Fortunately the door swang out otherwise we would have had a real accommodation problem. We were there for about eighteen months or so before we rented a small shop-front in the suburb of Bulleen. It was rather interesting because when I arranged with the agent to rent this, I also arranged for the place to be carpeted and painted. Neil O’Keith, who is now a Federal Member of Parliament, was one of our very early members, he was an Assistant Secretary of the VSTA and his father was in carpeting so we had his dad to do the carpeting. We got a friend of mine to do the painting. We were just about to move in, as a result of an arrangement being made with the agent, when we went down to put in our first desk that we had bought second-hand at Budgens at Richmond and a chair, which had been borrowed, we found the place locked. The actual shop-front had been sold by the agent to a new owner who knew nothing of the arrangement and had simply locked us out. So we were totally officeless for a period of two to three days before we were able to regain entry. We were there for about three years and outgrew it and moved to an office above a hot bread kitchen in Kew, of about 2,000 square feet. We were there for a period of time and outgrew that and had to leave it empty for a time while we built our building, also in Kew, which is about 7,000 square feet, 2,500 square feet of floor. That is where we are now and that is where we will almost certainly stay unless some unanticipated merger or development would cause us to move elsewhere.
How many members have you go now?
AP: About 32,000.
Assets?
AP: Assets as of last week were almost $119 million. We have always had a pretty close relationship with the other teacher credit unions. There is an organisation, as you are probably aware, the Australian Association of Teachers’ Credit Unions which is a valuable information exchange.
Have you been involved with them? Were you a member of that organisation since its inception?
AP: No about year two or year three we came in. Actually we came in on the nomination of the VTU Credit Union, which I think was an original member of the ATTCU.
So you have been involved with other credit unions, you get ideas from them and they get ideas from you?
AP: Yes we still do it. We still exchange each February. Last year, for instance, we had a session on succession planning, one of the HR areas that credit unions tend not to do very well. Interest rates from time-to-time. We may look at Loans’ policies or sometimes, for instance, line of credit, standby lines. These are the technical aspects we do share.
Have you imported anything like EDVEST which started with Teachers’ in New South Wales?
AP: Yes we were very early members of EDVEST. In fact Lester Yabbsley was probably as responsible as anyone for getting the concept of EDVEST going after he visited the United States and picked up some inspiration from the National Association of Retired People, I think they call themself.
NARCUP, what a horrible name.
AP: It is a horrible name. We were very impressed with the whole idea of EDVEST and we were very early users of it and still users of it.
Any other particular products that you have developed in Victoria, or have developed at all originally?
AP: No I don’t think we have developed any original products. We do do a few things differently, most credit unions do. One tends to be against conventional wisdom, for instance if we grant a line of credit or an overdraft to one of our members we never review it, whereas prevailing practice is to put it under review every year, to recall it if it is not being used or perhaps to remove it if for some reason it hasn’t been adequately met in terms of repayment. Over the thirteen years or so we have been running them we haven’t had any problem with members who have been granted it, with the result that if you get a line of credit from Ed Credit, or an overdraft from Ed Credit, it is not up for annual review as is commonly the case. We took the view that if the historical record was good, there seemed to be little point in placing restrictions on access to it. This is not a cherished view that is held by the regulators, I might tell you. We also have one of the lowest bad-debt rates, doubtful debt rates, probably in the country I think.
Your view of the business with Teledata and difficulties of the VCCA financially. There was also Emerald Lake wasn’t there?
AP: Clearly some very unwise decisions made as a result of indifferent Board and Manager management.
Did you get caught up in any of that?
AP: No we just missed the Emerald Lake thing as a piece of flossy fiction.
They used a lot of money up before they started.
AP: We didn’t see it as part of a legitimate business commitment that the credit union should be in. I know there are others who felt otherwise and I don’t wish to be deprecating of those who took it up as an interest and contributed to it, but you asked me whether or not we had been involved in it and the answer is no.
Good judgement, good luck.
AP: Good luck perhaps.
You had to change your computer system when the software started to change?
AP: Yes we did. We have never been in a hurry to change our computer system, only when the technical needs to do so have been insurmountable. Probably we have one of the oldest boxes about in Australia now. We have tended to upgrade it rather than replace it. We are at the situation now where we do need to go for a very definite replacement of it. Only when the need arose did we get into that very expensive item.
Is there anything else we should cover? Insurance were you involved with CUNA Mutual, CUMIS early on?
AP: Yes we were involved with CUNA Mutual and CUMIS. We moved away from CUNA Mutual for a period of time, but we are back with them now.
Did you know Stan Arneil?
AP: No I didn’t. I know of him of course.
He was involved in Victoria. I understand that he threatened to set up a league if they didn’t become an Association outside the Catholics at one stage.
AP: That may well be.
It didn’t happen because they set up the VCCA, they handed the Catholic organisation to the VCCA.
AP: I think Leon Magree was an early office holder wasn’t he?
He was one of our office holders too, at the Historical Co-operative. I have interviewed him of course. I have interviewed Alan Dash for the VCCA. When did you begin on the CUSCAL Board?
AP: I was the Chairman of the Project Renewal Steering Committee for a year and a bit. It would have been, I guess, in 1988, late 1988 early 1989. After chairing that Steering Committee I was elected to the new Board of CUSCAL for a two year period and again for a three year period. I have been on the CUSCAL Board now for five years.
The start of Project Renewal, can you remember how it started from a Victorian perspective?
AP: Well it had its genesis in Sydney, in fact, AFCUL. I wasn’t involved with AFCUL at all. I was drafted into to chairing the Steering Committee largely because of the work I had done as the Melbourne Co-ordinator of the 1988 World Council Conference. What they were looking for was someone without any political baggage, I think. They didn’t want those who had occupied obvious and prominent positions in the previous political structures. It was in that capacity, I think, I did the job. I hadn’t been involved with AFCUL before.
Well how did you become involved with the World Council Conference in 1988?
AP: I was approached by David Dinning of the VCCA to assist Roger Bell. Roger Bell was the Chairman of the Organising Committee and clearly additional assistance was needed. It was in that capacity that I was asked in.
That was a lot of work.
AP: Yes it was a lot of work.
What were the salient problems and how did it go along?
AP: As a conference I think it went extremely well. Probably established a benchmark for conferences of that sort, up until that time, I don’t say it will hold it for all time. But it was successful. It attracted people from around about thirty-five countries. Melbourne is hardly the nerve-centre of the world.
Somebody should tell them in that case?
AP: If they had been told, perhaps they wouldn’t have come.
I thought it was the nerve centre of the financial capital of Australia or South-East Asia.
AP: Well we believe that, but unfortunately the knowledge is not widespread or agreed with up this way. That is how I got into the federal scene really, acting as the Melbourne Co-ordinator of the World Council Conference. I am still a member of the CUSCAL Board, have been for five years, and for the last two years I have been the Australian representative on the World Council of Credit Unions.
Any more input into the World Council?
AP: I am the Treasurer of the World Council and a member of the Executive.
What does that entail?
AP: Oh it entails expressing the sorts of interest a Director should have in any corporate set-up, including a credit union set-up. Directors should have a pretty good idea of what they want and what they need and what they should get in order to be fully informed. To that extent it is a role which is more of an elected person supervisory role. Certainly it is not a hands-on-figures-on balance sheet role.
What about the Steering Committee towards Project Renewal?
AP: As I was saying earlier a couple of people who were very significant in getting this going were based in New South Wales. I would probably attribute to Reg Elliott most, I would acknowledge him as being a key mover, if not the key mover, in getting this moving. Reg had a very clear perception of what our model needed to be. He could see our competitors, the banks, moving in that direction. He argued convincingly that unless we were able to structure ourselves similarly with a national presence rather than a loose federal presence, which AFCUL was, we would be organisationally disadvantaged. I think it was very creditable given that Reg was only within two years of retirement in raising this, arguing for it and having it accepted by the movement. He really put upon himself a two year period of very intensive work just before retirement. That is pretty gutsy in my view.
Do you think he was forced to put his retirement forward in order to enhance his credibility?
AP: Oh I don’t think I could comment on that.
I haven’t had a chance to ask him about that yet, but I will. I have interviewed him but he didn’t want to talk about Project Renewal at that time because it was all going on. He will now no doubt.
AP: When you get around to talking to him you can make mention of the fact that you have spoken to someone who regards his initiative as mainly responsible for what transpired.
Also Vern Harvey, he was with PA Consultants in all this. When did you first meet him?
AP: I met him at the time of Project Renewal, that would have been in 1989 when I had my first meeting with Vern. But PA did the basic design. They also did the Project management development of project development modules and indeed worked with us for about an eighteen month period at very close quarters.
To what extent do you think the Campbell Committee had any bearing on what happened in Project Renewal?
AP: I think it had a very real influence. I think it was a background influence that in retrospect was significant.
I notice, from the other side, interviewing credit union people, Directors, sometimes Chairmen, who had an input into the Project Renewal they would vote for it as a credit union but they would come back and say it was all wrong, what was happening to the credit union movement. They were thinking they would lose representation.
AP: That was a concern that was shared by many and I can quite understand that concern being experienced. As you know the Membership Council of the new structure is forty in number and it was made deliberately big in order to partly replace the many subsidiaries with separate Boards of Directors that AFCUL had. I think there were about 140 Directors in the organisational chart of AFCUL as it was. We used to refer to it as the mud map. Or as one fellow, who was the Director of a credit union in Sydney, said to me once, “If I didn’t know better looking at it, I would say that this was a very outstanding case of a refinery design that has gone wrong.” The Membership Council was some attempt to still have a significantly large body of elected people who went right back to credit union roots, or right up to credit union roots, who were part of the governing structure.
What about the opposition which is now the Credit Union Association, were you party to any of the negotiations to try and get that group in?
AP: Only in a very informal sense and only peripherally. I would say to you, well it is a cliche really to say it is unfortunate that this division exists, but I think quite frankly that a lot of the venom, the phlegm, the dispute, the sense of need to defend honour is slowly disappearing as time goes by.
Yet the New South Wales credit unions that have been involved in that group, they virtually stem from the time of the insurance split back in the days that Stan Arneil was General Manager of CUNA Mutual and CUMIS.
AP: I didn’t realise that. That is an interesting point.
Of course it doesn’t apply to the Victorian ones, nor the Queensland ones.
AP: I didn’t realise that.
Phillip Elliott was the head of the organisation in Victoria which was outside the VCCA wasn’t he?
AP: Yes it was called Credit Union Corporation Limited. As you know Phillip was at one time Interim General Manager of the VCCA.
I have interviewed him too. What about the story of Project Renewal, that is a story in itself.
AP: Yes it is a story in itself. There is something to be written there, undoubtedly. It was a striking development not only because of the high level of skill that was used in bringing it together, not only because the legal devices by which it could be brought together were very cleverly developed, but also because fortuitously Pyramid happened. The run-out of funds after Pyramid, where in Victoria you will be aware there was an across the board 6 per cent outflow of funds, certainly highlighted the need for a collective federal response to be possible. The VCCA, of all the co-operative organisations at that time with its credit unions, covered itself with glory in defending that position, I believe. As you will be aware there was no trundling off to government by credit unions for guaranteed lines of credit. The hole that was there, and of course Moe exacerbated it in local terms, was a hole that was heroically filled.
Are you involved with the Reserve in Victoria at all?
AP: Yes. I was a member of the Reserve Board in Victoria. I was a member of the Reserve Board for about four years.
Anything significant during that period?
AP: Oh well of course the fact that during the run-outs of funds, during the diminution of credit union holdings, during the time that some credit unions could have been theoretically insolvent at that time, the Reserve Board to its credit didn’t lose its nerve. Just as the VCCA, which was providing the liquidity support, didn’t lose its nerve. Nor did credit unions that were part of that lose their nerve. I developed a fairly high level of intolerance to credit unions at the time who were not affiliated with the VCCA and therefore who didn’t have the liquidity backing of a collective organisation, just at a time when it was needed. Fortunately we pulled out of that hole in time, but I am very sure the affiliated movement would have enabled or provided financial assistance to non-affiliates if there had been a need for that to happen. The Reserve Board was I think the work of Jack Paterson in particular in putting out brush fires of lack of confidence around Victoria. It was quite outstanding. It was a very good example too of regulators and industry associations working together for a common goal. I am a little bit disappointed that the importance of this co-relation between regulators and between powerful industry associations has been partly forgotten.
I don’t know much about the regulators in Victoria. I have observed them over the years in New South Wales. Well we are coming to the end of the tape, so any regrets?
AP: No. I find the whole credit union experience has been one where in heavy balance I owe the credit union movement a very significant debt of gratitude. I think very few who have worked in the credit union movement for a period of time haven’t been touched by it or improved by it. I have seen both of those dimensions. I have been as an individual a very great beneficiary.
Thank you very much Mr Alan Parry.
End Tape 1B: 3901 Words: 1 hour 15 minutes