25 AUGUST 1989: RICHARD RAXWORTHY TALKING TO JOHN PRESCOTT
Where were you born and when?
JP: Born in Melbourne in 1941, during the War.
What were the influences on your life when you were a young kid? What was the area like?
JP: Well it was at Ivanhoe, which was on the railway line on the way to Heidelberg Military Hospital. I don’t remember much about my life in Melbourne, because we came to Sydney just at the end of the War in 1945. The only thing I really remember is the Military Hospital trains coming up the line and me standing outside waving to the soldiers. That is about all I remember.
What sort of influences did you pick up from your parents do you think?
JP: Well a couple of things from my own family. My father was always involved in left-wing politics and Trade Unions, so that was a fairly big influence. Also my youngest brother is mentally retarded and that involved a fair bit of charity work and that kind of thing. So I think a lot of things brushed off, the idea of doing good things for your fellow man for not much recompense, you know. Basically that is the family history I would say.
So they sort of balanced each other out to some extent.
JP: Yes, that’s correct. Also I think my father’s absence from home at meetings or whatever for long periods, or at least a lot of days out of the week, has had an effect on me where I now refuse to give that sort of commitment to any job I take on.
You did for a while with the credit unions anyway.
JP: Yes. I guess it is still there. I am out at least two nights a week, possibly three, but I try as hard as possible to be at home, certainly on weekends. In fact in the early days when this credit union started and when also I was involved with the national movement, when Dermot Ryan was the Chief Executive Officer and required some form of financial expertise or assistance.
We had better start further back I think. What was your education like? What did you like or dislike about school?
JP: Well I was pretty good at school. I went to the local primary school at Rosewall. I went from there to what they called an Opportunity School, which is supposedly for the kids with high IQs, at Artarmon. From there I went to North Sydney Boys’ High, which is a selective high school. I suppose I could have been good at just about anything I wanted to study. I was very good at languages, at least learning them. I did three foreign languages for the Intermediate Certificate. I was never any good at Physics and Chemistry and I can’t understand that because they are mathematically-based subjects and I am a fast mathematician.
Fast at calculating?
JP: I used to be, have slowed up a bit now. That was schooling. I left there in 1957, got the Leaving Certificate. Didn’t bother going to university, had no ambitions at that stage. Probably the family couldn’t have supported me anyway. I went to work and started at the City Council as a Clerk.
When was that?
JP: 1958.
So you were there before the credit union was actually started?
JP: Yes. I started studying accountancy straight away. I studied accountancy at night school. I got through in five years, I think. Then I became some time later the youngest ever Accountant appointed at the City Council. In those days the Accountants always seemed to be somewhere between fifty and sixty years old. I was, I think, twenty-four. That was quite a spectacular achievement in some ways.
For the Council and for you on Council. What first involved you in the credit union? Did you have any need for finance yourself?
JP: Yes. The first I remember about the credit union was when Dermot Ryan, who I didn’t know at the time although I knew who he was, came around. They were starting this thing off and he jumped up in the middle of Treasury on somebody’s desk and said they were starting this credit union. Well it meant nothing to me, I must admit. They started it within the City Council on the idea that it was five shillings to join and five shillings a week. That is how they got their finances and they signed up I don’t know how many people but certainly it seemed to me to be half the staff within no time, which included me. I guess it was optional but it was sort of put to you on a fairly leaned on fashion to join.
By your superiors?
JP: They organised it as usual, very well. They a plant to spread the word in every department and they just went around and signed everybody up.
This was Dermot?
JP: Dermot and his people, yes.
You were not one of those people then?
JP: Not at that stage, no. I just joined and put my money in. I don’t think I touched it for a long time until something happened to the car, either resprayed or major repairs. I just didn’t have the money, so a chap I was friendly with at the time knew I was involved in the credit union suggested that I approach them for a loan. I did and got that loan and paid it off. I was still just a member. My official attachment with the credit union started I think in 1968.
So you weren’t involved in the inaugural meeting or any of that?
JP: No. I was just a member.
You didn’t hear about the instant loans?
JP: That became some of the folklore that I learned later, but I didn’t hear about it at the time. It was all foreign to me. I was one of the mugs who was putting five bob in to fund the instant loans. That is really how it started. In 1968 another person who I had been working with, Kevin Murray, was appointed, or elected, probably appointed in those days, by the Board Chairman of the Supervisory Committee, which is a type of internal audit committee. He was looking for someone with some kind of financial expertise because at that stage the Supervisory Committee consisted, in the usual democratic fashion, of a tiler, a brick-layer and a gardener and they were all good natured blokes but very little credit experience if any. So Kevin was looking around for someone with some kind of financial expertise and we had worked together in the Internal Audit Department of the Council. So he approached me and I said I would be in it. So that is really how I became closely associated with the official basis of the City Council Credit Union, on the Supervisory Committee. I stayed with that for some time. Once again I can’t remember if I moved from the Committee directly to become a member of the Board or whether I got out of the Supervisory Committee, probably because of other pressures, and was then later invited to join the Board. One or the other, I can’t remember which.
Do you remember your other Committee members on the Supervisory Committee? Do you remember Barry Holmes?
JP: I think I may have taken Barry Holmes place actually. The people I remember were Kevin Murray, Bernie Mason, Bobby Randolph, who was a brick-layer, Leo McGlynn, who was a tiler, and Bill Hackett, who was a Council By-Law Inspector. There may have been others but they are the ones I remember. The nights were quite famous. We used to go over and start work about quarter-past five, half-past five in the old building the other side of Clarence Street and work until about seven. Then we would go and have a Chinese meal up at Oxford Street, up near where the gay centre is now it wasn’t in those days. Then after the Chinese feed we would go home. Occasionally before we got to the Chinese restaurant we would go to one of the local pubs. One of the pubs that we used to go to, the name of which escapes me, was down off Wentworth Avenue and had a jazz band in behind the bar.
I remember it too. It has been pulled down for a car park now.
JP: It will come to me in a moment. But we had some great nights, more drinking than anything else I would say.
You did your work first?
JP: Yes always, that was serious. It wasn’t terribly hard, I guess, for a trained accountant, but it was worthwhile.
Did the others manage to do their bit as well?
JP: Yes they did the filing and once you taught them what to check and what to look for they were quite competent. They just lacked training that is all.
So any stories you can tell out of that period at all?
JP: Memory is a bit hazy, but I think the idea was of going down for a few drinks after work to the jazz pub and then going for a Chinese feed, because I didn’t like Chinese food at that stage but they taught me how to eat it, then trying to get home at midnight.
Wife was not pleased.
JP: I wasn’t married in those days. I married late, possibly because of my connection with the credit union.
When did you first get on the Board?
JP: I can’t remember exactly when that was but I would say it was around 1973.
Who was the Chairman then?
JP: I think Jack Bannister. I wasn’t there when Dermot was Chairman, definitely not. Jack Bannister was the Chairman. Jack Coyne was on the Board, Murray O’Brien was on the Board, Ron Preston was on the Board, Dave Lawler and myself. The others I can’t remember.
As far as Dermot was concerned did you have much to do with him at all?
JP: Yes a lot. Up until that stage he hadn’t been much of an influence on me. But while I was on the Supervisory Committee this credit union had a reputation, well-deserved, for educating people in credit union ways, philosophy, dogma, whatever you like to call it. So while I was on the Supervisory I was invited to attend some the Credit Union Schools at Newport and that sort of thing. At one time this credit union even played host for one of the meetings of AFCUL, the national body. We supplied cars and attendants, if that is the right word, we put on a barbecue at Washpool National Park and I was very heavily involved in that. So I knew Dermot fairly well. I got to know him a lot better when later on I was invited to join AFCUL as their Assistant Treasurer to help out with the finances or the book work to be more specific. Dermot has probably been a fairly major influence on my life from that point of view, as he has no doubt with a number of others. He is a fascinating personality, domineering in a lot of ways. Apt to get his own way, able to talk people into doing things for nothing, remarkable at that, at all levels, he has conned everybody.
Have you got any stories you can use to illustrate those various facets of his character?
JP: Yes. I have become known as the trained Accountant who is available for just about anything. On the way through I have been the Assistant Treasurer for AFCUL, which wasn’t anything like the body it is today, it was really just a national secretariat. From there I became Treasurer of AFCUL. I became Treasurer of the AFCUL Foundation, which is a fund set up to help overseas countries, particularly in the Pacific. I became Treasurer of the Historical Society. That is all because Dermot would get on the phone and he has a way of convincing you that you really have to do it for nothing and this really won’t take very long. It usually ends up taking about three days a month, time you can’t afford. I think one of the most famous stories that I ever heard about Dermot was they were in Canberra negotiating the tax arrangements, which eventually exempted credit unions from paying income tax. A lot of preliminary work had gone into that while the ALP were in Opposition. When they become Government in 1972 I think the legislation came through in 1973 or 1974.
Dermot was one of the ones responsible?
JP: He was one of the major people responsible for that. He also was able to use people based in Canberra, his connections within the ALP to get to pretty well everyone he wanted to get to. Very well managed, an excellent negotiator and an excellent what you might call ‘fixer’. But the story was we had tried to negotiate the tax through Treasury on what you might now days call a level playing field. We were getting nowhere with the Treasury so Dermot bet them that if he couldn’t get it through Treasury he would get it politically. I think the bet was three bottles of beer. This was one of the senior trumps of the Treasury Department. When they finally did get it I understand it was in the Treasurer’s office, Frank Crean’s office. I think Dermot owed the bloke from Treasury three bottles of beer for some unknown bet, so he pulled the bottles out all wrapped in brown paper and gave them to the bloke across the table, this was in the Treasurer’s office. The bloke from Treasury wasn’t sure how to handle this at all, he had never struck anyone quite like this. Crean told him to take them. Whether that looked as if it was bribery or not, that was just Dermot’s way of doing things. A bet was a bet and he paid his bets, he paid his dues. A fascinating character. One of the fathers of the credit union movement in Australia and certainly the driving force behind the formation of this credit union.
Do you remember anything about the disagreement between him and Stan Arneil, or the movement generally as it became over the insurance?
JP: Yes. There was some fairly famous meetings or battles, probably both. I was present at a number of those meetings, big meetings of the State Association, or the League as it was. There was quite a famous meeting at the Round House at the University of New South Wales when a number of credit unions walked out of that meeting. It was a pretty sad occasion.
What for?
JP: I am not sure what the real background was, but CUNA Mutual at the time had an insurance organisation and as you paid the premiums then it created a pool of money separate from that required for the actual insurance part of the business. The idea of that pool of money was to fund the promotion, or whatever you like to call it, of the movement within a particular area. The real argument was not over the pool of money but who ran it. My understanding is that New South Wales in particular and Australia in general wanted more control over how that money was spent. CUNA Mutual’s argument was they retained the right as to how that money was to be spent. That really caused some major problems at that time. It was fairly sad, fairly traumatic I guess for a young bloke like me at the time. I was also present of some of the National Executive meetings.
Did you know Stan Arneil?
JP: Yes I knew him. Not very well. He took it hard, he still does so I understand, which is unfortunate. There is a time and a place in history and Stan certainly had his time. He was a marvellous speaker, a marvellous motivator. He could tell stories and have people crying or laughing or whatever. There are so many people who I know who disagree with what he did I would have to say he was wrong, without necessarily knowing the real background to the story.
Some people take the other attitude that it was all over the rate, the actual money. Their attitude was it was just too expensive.
JP: I think that is based on what was done with the pool of money. If the pool of money wasn’t there then certainly it could have been cheaper. It was expensive but the expense was partly there to generate this pool of money for the promotion and development of the movement. I think the real argument was over who ran that pool of money. That is my understanding of it all.
So when you became involved were you involved in the Chapter in the first instance?
JP: No.
You were involved in the League in the first instance.
JP: Not the League, the national body AFCUL. That is where I came in. Once again it was through the City Council Connection, which was fairly strong in those days. Dermot had a Treasurer, Ron Preston, who was a chap I had worked with in the Town Hall and for who I had great respect. They thought they needed someone with letters after their name to shut some of the interstate people up who were starting to cause problems about AFCUL’s finances. So I was known to Ron and I had letters after my name so they got me. The Assistant Treasurer was a fairly glorified book-keeper actually, but it had the desired effect as far as I am aware.
Was there any cause for worry about their finances?
JP: Well it was very early days. I mean the thing ran on a shoestring. There was a dues structure and that pretty well paid for phone calls and fares and not much else. People were starting to worry about the place being in deficit and who was going to fund the deficit. But the amount of money involved was really piddling. I think if you did it in these days there would certainly be cause for alarm, but in those days I think the true target was Dermot, or AFCUL, or both. I think they were trying to destroy Dermot, or AFCUL, or both, rather than take an attitude that we were on to something big so we had better run with it. If it had run into a little bit of deficit like $15,000, $20,000 or even $35,000, who cares? In the long run somebody would pick it up.
The Australian Federation of Credit Union Leagues, as it was then, what was their particular function?
JP: It was a national secretariat. It was set up in 1966 or 1967 by agreement between Queensland and New South Wales. Then it fairly quickly spread to the other States. I can’t remember in which order they came. The idea was to talk to the Federal Government on things like taxation, direct payment of Government pensions to credit unions, things like the home purchase subsidy, Home Savings Grant. These all required negotiations at national level, preferably by a single person or a single party rather than six States all going in negotiating separately. That is where the idea came from.
Who was the first person to take the Presidency?
JP: The first President, I think, was Beresford Calverley, either him or Stan Arneil. Dermot was never President of AFCUL. He may have been Senior Vice-President. He was certainly Treasurer at one time and later become the first Chief Executive Officer, that is the first employee. To my knowledge he was never President of AFCUL. It was a bit like another person who had a big effect on my life, particularly in the credit unions, Ken Miller. I worked for him for a number of years, he was never ever President of AFCUL. He is fairly commonly acknowledged as being one of the political geniuses in the credit union movement in the last twenty years.
He worked in the credit union movement as an employee?
JP: Yes he was involved in the New South Wales League, he was involved in AFCUL. There was a credit union, New South Wales Teachers’ Credit Union, which was having some problems at the time in 1970 and they needed a Manager and Ken was appointed the Manager. I started with that credit union as the Accountant in 1972. In 1987, when Ken retired as General Manager, I took over that position. I had all that time of working with him. Once again one of the brilliant men.
Was he in the academic world?
JP: No he was a public servant, a clerk.
It seems to me there are a lot of clerks who left school after Intermediate who seem to run the credit union movement now.
JP: I would say, as a professional, when I joined the City Council as an employee in 1958 every junior clerk who started in accounts, and I was one of them, very few got through. I was one who persisted and eventually got through. I have to say in my dealings with the City Council, my life working there, some of the best clerks I have ever seen worked there. People who probably came from poor backgrounds. Most of the staff at the City Council in those days, particularly the clerical staff and the outside workers, actually lived in the city area. Most of them came out of Ultimo, Surry Hills, Redfern, those sorts of places. I think a public service job as a clerk was looked on as an advancement on what their parents had done. That has probably carried on again since then. I don’t know what their children are doing. What they lacked in academic qualifications, or education, they made up for in general commonsense. I think given different circumstances a lot of them could have been anything.
My point is they are anything now. They are running credit unions all over the place handling millions of dollars.
JP: That is correct and I think their natural intelligence shows through. That is what I put it down to. Some of the most brilliant clerks and smartest men I have ever seen came through there. Far smarter than I am for instance, despite all the letters at the end of my name which only meant I finally managed to get through exams, nothing else.
Any stories you can tell about Dermot, apart from the ones you have already told?
JP: Only some of the disasters that have happened through knowing me. In days gone-by he was a great drinker and to try and keep up with him was something else. I never could. I was never able to drink scotch, for instance, but if you went to Dermot’s place for a discussion, it always seemed to be important if the discussion lasted more than ten minutes without getting into drinking and talking about something else. He used to drink scotch and fizzy orange. He would go through a bottle a night quite easily and I just couldn’t handle it. Many the night I just slept there and got up at three or four in the morning and just drove home. Coupled with the work that was required most of which was after hours because you had your own work to do during the day, you worked a lot of nights a lot of weekends. You were supposed to fly or go to wherever on the drop of a hat. I would have to say this is most probably one of the reasons why I didn’t get married until I was thirty-seven. I think it probably caused the breakdown of a few relationships along the way. However, that was always my choice at the time.
How different was Jack Bannister when he became Chairman of the Board here, to Dermot?
JP: Different style of person. Dermot was, and still is, basically a larrikin of the old school. Jack is an old air force pilot, and I understand you are too, so he is a bit more of a stickler for the rules. Stickler for the rules, air force type. Pompous I guess in some ways, far more pompous than Dermot ever was. Liked to run meetings properly rather than steamroll them. Just a different style of person, completely different style of person.
Can you tell any story of him which might illustrate his personal traits, his style?
JP: He didn’t like meetings getting out of hand. He liked to run them far more formally. Pretty well more than any of the Directors liked to run them. Most of the Directors seemed to be used to Dermot’s style of running a meeting, or to jump a little bit Jack Coyne’s style which can be formal at times but he also likes to let them run a little bit. Jack Bannister seemed to run the meetings according to the book and I am not sure it worked all that well. A great Chairmanship and the Board ran quite well when he was here, but he always tried to run the meetings properly and I am not sure that was the way the Directors wanted it done. They were more used to another style.
More larrikins than others?
JP: Definitely, and still the case. Definitely still the case. I will have to say the City Council guys generally are a bunch of larrikins. It taught me a lot coming from basically a middle-class North Shore background, apart from my father’s political views. Chatswood was very middle-class, particularly compared with where most of the guys came from, and you just learned a different idiom particularly. I found that amazing in my basic education.
Apparently they were effective though.
JP: Oh yes. But I was a different person. I don’t know what would have happened or what I would have been if I hadn’t been connected with this credit union movement, and this credit union in particular which for a number of years held enormous influence at State, national and for that matter international levels. Enormous influence. I was happy to be part of that.
You just mentioned Jack Coyne, have you got any stories you can tell about him?
JP: Well I have been off the Board now since January this year.
End Tape 1A: 4424 Words: 1 hour 30 minutes
25 AUGUST 1989: RICHARD RAXWORTHY TALKING TO JOHN PRESCOTT
JP: I found I was only eight or nine meetings a year and I didn’t consider that to be sufficient in my own mind to remain an effective Director of the credit union so I resigned early this year. As far as Jack Coyne’s Chairmanship was, I think he probably misses me. After Board meetings, which used to finish around 7.30 p.m. or 8.00 p.m. people would sit around and have a drink and something to eat and I tended to leave here at 11.50 p.m., mainly because the parking station down the road shuts at midnight. I used to keep Jack company and we used to talk about old times and go through the same story time after time. But they were great nights and I miss themself actually. As far as a Chairman, Jack’s a fairly forceful personality but Chairs a meeting remarkably well. Has a Trade Union background, a political background. He has been involved in those types of things for some time where he knows the politics of a meeting and knows how to run a meeting properly. I regard that as an art because I am hopeless at it myself. He is very good, he runs a meeting well, he can keep people in check but at the same time allow discussion to continue where necessary. I regard him as one of the better Chairmen that I have seen anywhere. I am not sure what the credit union will do when he decides to step down. As I said it is an art but the place doesn’t depend on Jack Coyne being here, he would be the first to admit that, this place will survive it always has.
Any of the personalities you remember particularly?
JP: Well Tommy Duggan has always been a personality. He has been a Director and I think he is a Director now. He is a singer of Irish songs, a teller of tall stories and an excellent raconteur. Tells stories like ‘The Spider from Magwyder’ and various others. He can rattle them off, the whole twenty-six verses, without missing a beat. Once again it is an art I respect because once again I am hopeless at it. He is good. He is well-known for it. The other people, David Lawler is a champion of the one-liner and can bring any meeting to a shuddering halt fairly quickly by putting in a one-liner. You would need to talk to him to get more.
I have already talked to him, but he hasn’t put any of his one-liners in.
JP: He is great, and he is fairly well-known for it.
Have you got any of his one-liners that you can use to illustrate that?
JP: Well there was a meeting of the State Association some years ago and it came to some contentious issue, which escapes me now. They were trying to establish a vote on it and for some reason of order at the meeting people voted for it and then found out that they had voted, in fact, against it. There was uproar and it meant there was no further discussion on that particular item of business and they was going to be blood on the floor fairly shortly. So Lawler stood up and said, “Let’s make it the best two out of three.” Well that seemed to solve the problem. I still can’t remember how they got over the problem, but I think the meeting decided that the previous resolution didn’t exist and would start all over again. He sort of brought it into perspective a little, I think. Another person who has been on the Board, but is no longer on the Board, who I had a lot of time with and a lot of time for was Ron Preston. One of the most brilliant minds I have ever seen. Once again, just a clerk. I know at one stage he did take up accountancy but gave it away because he found it too boring, it was too easy. I had a lot of time with him in various places in the Treasury when I worked there, in the Internal Audit when I worked there, later with this Board and also at AFCUL level where we worked together. He taught me a number of things. Once again he was a drinker, as most of us were and most of us still are to some extent.
Dave Lawler?
JP: David Lawler was never a drinker. He may have an occasional glass of wine, but he is a kind of outcast you can never understand how he got on the Board being as he doesn’t drink all that much. They are all old-timers I guess. The place must move on. I went to Ron Preston’s retirement dinner about three weeks ago. It was good to see him but sad to see him go, I guess.
Did you have anything to do with Roy Tulloch at all?
JP: Yes, Roy the boy. He was one of the first employees of the credit union. Most of the early employees, including the current Executives, were at one time Directors of the credit union. In fact in the early days, not just in this credit union but in most credit unions, the Directors used to do the work in their own spare time. Roy used to be their ‘plant’ so-called in the Pay Office. He would pick up anyone who was leaving, likely to go without paying a loan out. He would handle the payroll deduction facility for the credit union. Eventually they were looking for a Loans Officer and they got Roy. He was an identity here for many years. Always had the City Council Credit Union at heart and I got the distinct impression didn’t really like the change that came over the credit union when they changed to Sydney Credit Union and gradually expanded its area of operation, away from what Roy saw as being its base. To some extent I would agree with Roy.
Did you agree with the extensions and amalgamations?
JP: The amalgamations are okay. I think a number of the people you will be talking to would probably disagree with me, but I don’t think it was such a great idea to go into the open community. I think it has created problems that the credit union could have done without. I think it was done for reasons of growth and I doubt that those reasons are in fact legitimate. At the same time, when it came up I didn’t vote against it so I can’t complain too much. I think they should have restricted it somewhere along the line to City Council, or at least council employees and taken in the local councils who were too small to probably support their own decent size credit union and kept it at that. Maybe a little bit of expansion here and there. It doesn’t just apply to this credit union, but the major metropolitan-based credit unions who have expanded greatly into the community at large haven’t done too well out of it. I think it has basically cost them money to do it. Not that they are going broke, but they are now charging higher rates than they would have if they had stayed the way they were.
What do you think about the possible move to drop the bond?
JP: I don’t like that much at all. In practical terms it will be interesting to see what happens. I mean it doesn’t really matter if the bond is there or not as long as the credit unions keep it. The legislation can please itself. I believe that credit unions exist through their bond of association, now that bond may be fairly wide or it may be fairly narrow. The credit union I happen to work for is the largest credit union in Australia but has a very narrow bond, there just happen to be a lot of teachers in New South Wales. So we actually operate rather more like a small credit union. This credit union, Sydney Credit Union, has expanded its bond. I think the idea of doing away with the bonds will mean that credit unions may well lose something out of it, particularly if the banks and other competitors get hold of it. We have got to be a bit careful of our tax exemption, that is my major question about the whole thing. I think most credit unions will handle it properly but I am a bit worried about the so-called cowboys.
What about the changes that have come over the credit unions over the years to the point where they are virtually competing with the banks in direct terms?
JP: I don’t agree that they are competing in direct terms. I think they are competing with line services and if you are a financial institution, whether you are a co-operative or not, then basically you will supply pretty well the same services. These are deposit taking in various forms and lending in various forms. I think the credit unions differ, or most of them do anyway, in their sense of belonging to their membership, their additional effort they put in to servicing their membership, their feeling of belonging to the community and putting something back into the community from which they draw rather than just straight commercial sponsorships. I would have to say that I think some credit unions don’t look too much different to banks. I think the more we look like banks the less we look like credit unions and I think if that keeps going then we might as well shut up shop and go home, what is the difference.
Do you think the Sydney Credit Union has kept to its principles in serving its members?
JP: Yes definitely it has attempted to keep to its principles, probably better than some others. Basically that is because of the philosophy of the Board, I would say, and of the management. As I said earlier, the management of this credit union basically comes from original members of the Board so they have the credit union philosophy at heart. This isn’t always the case with credit union Managers some of whom are brought in from the banking industry or outside finance industry anyway. I think Sydney Credit Union has done the best it can. I think it would have done better if it had restricted the growth or expansion of its bond. I will just leave it at that I think.
What about the future?
JP: Sydney Credit Union has got a future. I believe with their current bond expansion that they have, they should have a fall-back position in case of a financial disaster. I don’t mean that as a disaster for this credit union, but certainly for the economy as a whole. If there is a major problem either Australia-wide or localised they should have a fall-back position. That fall-back position, I believe, should be to fall-back to basically its original bond, or at least a tighter bond than what it has now. It will be interesting to see what happens. I think the credit unions are big enough and strong enough to continue. I think the major problems for credit unions in the future will come in two areas, the very big ones should survive, the very small ones will probably survive and I believe the real test is in the middle. Sydney is in the middle. I think the $25 to $50 million credit unions are where the real pressures are going to be. Those of $100 million and above, and there are a gradually increasing number of those, should be big enough to withstand any pressures.
You reckon they might have to contract into their old area and not expand into another area?
JP: Well they do one of two things. I think they should look seriously at their product range. Credit unions in this area of $25 to $50 million in assets probably try to compete with everybody. I am not sure they have got the financial strength to do it, given the spread of branches necessary to support their bond area, that is an expense in itself. They should look at the product range, should they be in everything? Some of the products can be expensive, particularly if you are into chequeing, Visacard and that type of thing and at the same time run branches, which are in themselves expensive. I just find that a little worrying. It is okay at the moment, but if the pressures come on in the future they should be prepared to move someway.
You have got a fair history, I suppose, of the bad debts of Sydney Credit Union, how do you think they have handled things generally? Is it getting worse do you think?
JP: I think the way they are handling them they are getting better. Their bad debts are probably going up, but everybody else’s are too. I mean Westpac provided for half a billion I saw the other day in the paper. Some other bank just recently stated that 10 per cent of their portfolio was non-performing. That is fairly horrendous stuff from a major institution. Sydney is nothing like that. I think in the early days credit unions threw money around a little bit but they didn’t have the bad debts because people basically didn’t have access to any other forms of credit. That is why credit unions got off the deck. Nowadays you can have eighteen bank cards, forty-five personal loans and no-one seems to care very much until the crunch hits. Sydney are definitely handling it. They got into trouble a few years ago by not handling it properly. I think they have overcome that.
During which period was this?
JP: It was about three years ago. There was a major blow-out in their bad debts.
Was this after Roy Tulloch’s period?
JP: Well after Roy’s. They had a chap here, whose name escapes me, who was the Credit Manager, for want of a better term. My understanding is he was falsifying the figures to make his job look good. In fact the figures were fairly bad. It took them about two years to overcome it. It was probably a down situation in the credit union’s history.
The secret of not having too many bad debts is knowing the people in the earlier days.
JP: Yes, well the place was a lot smaller. They knew everyone, just about, by name. They probably knew where they lived. They knew the person who lived next door to them.
What about the arrangement they had with the superannuation?
JP: The legal arrangement. That worked quite well. Didn’t have too many defaulters. I am not sure how legal it was but it was legal. All they said to the Superannuation Board was that they would pay their money into their savings account, so they did. All the credit union was saying was they couldn’t have the money until they had paid the loan out. So I guess it was legal, very close, but it worked.
Whose idea was it?
JP: I don’t know, it was probably arranged as those things were in those days with Dermot ringing someone up saying we had a good idea but how did we fix it? We had members of the MEU, or officials of the MEU were entitled to be members of the credit union. I think also the officials or employees of the Government Superannuation Board were also entitled to be members of the credit union. So it was a natural tie-up.
Was Dermot involved with the MEU?
JP: Yes he was involved. So was Jack Coyne. They were all involved somewhere along the line.
I haven’t inquired into that because I haven’t got round to Dermot yet, but I will next week. The trouble is when I have finished with him I will have to start again.
JP: Yes it will be several hours with Dermot. You will need a long check-sheet, I would suggest.
Longer than this?
JP: A lot longer yes.
I had better prepare myself.
JP: Yes I suggest you would need to expand that substantially and try to get it through year by year. Dermot is a little bit older now, his memory won’t be quite a specific as it used to be and he will probably be jumping backwards and forwards a fair bit from year to year. I can remember when he would jump to 1975 then back to 1963. I don’t know enough about it to give you any real assistance but that is what I suggest, you try to keep it down either to years or subjects.
I have got the subjects covered here. For instance if we stick with the Chapter and then the League and go through. I have got to also ask him about MEU and ALP as well as his involvement at the parish level.
JP: His history with credit unions goes back many years, well before Sydney.
Well he comes in about the same time as Kevin Yates doesn’t he?
JP: Yes. Dermot goes back to the early 1950s, something like that, which is way before I even understood they were around.
I am sorry I didn’t get Kevin Yates.
JP: He was a lovely fellow. He is known as the founder of the first credit union in Australia. There is some discussion whether that is actually true, but it is generally acknowledged as being the first true credit union.
How well did you know him?
JP: Not very well at all.
You were at that meeting?
JP: Yes, I think that is probably the first time I had met him. I had known his name, but I had never met him.
That is a great pity. Now as far as subjects, were you ever involved in savings and loans counselling?
JP: No. I was the finance genius on the Board, I was the accountant that they snaffled.
So accounting methods, we haven’t covered that properly. Were you involved right from the start?
JP: No, but there are some stories that have come out of that. They basically did it by hand. Then they employed some of the smarter clerks around the place to do the interest calculation and keep the records for members. This, I understand, was the first credit union to go on to some form of computerisation. As I understand it, it was a very early and very basic computer program developed by IBM. About all it did was keep the balances accurately, didn’t do too much else as far as I remember, certainly not very much information available to the members as such. It has come in leaps and bounds since then of course. The current system which this credit union has, which is available fairly freely to most credit unions in Australia, is, I believe and I have seen similar systems elsewhere in the United States and Canada, by far the best system available. It is a brilliant banking-type system for small operations.
Did you have any hand in setting the system up as it is now? The movement from the original IBM tapes onto the computerisation?
JP: Not as far as Sydney was concerned, but I certainly have had a lot of input into how the system is designed and that type of thing for the movement generally. It became available generally in New South Wales in about 1979. Through my work with Teachers’ Credit Union we have been very involved in the development of the system since that time. I have had significant input. I wouldn’t say I have designed it, someone else designed it, but certainly I have been on a variety of Boards and Committees to see what should be done and how it should be done.
In the Sydney Credit Union, what has been your major financial contribution? What did you actually have to do?
JP: Well as far as work was concerned, not much. I mean the place has always run itself. Since I have been on the Board I was always part of the budgetary sessions. I was always part of the salary negotiations, probably because of my outside knowledge and involvement giving an outsiders point of view. I was always there at monthly finance time to answer necessary questions, back up the Board where necessary, back up the Manager where necessary. Once again, perhaps give a second opinion so that the Board, or some of the Board members anyway, could be a little more happy with the way things were running rather than think they were being snowed by the Managers. I am not sure that happened, but I think there probably were, and still are, a number of Board members who don’t understand financial statements very well at all. I think they relied on me to be the honest broker.
You knew Owen Jones, what was he like?
JP: Well he was the first Manager, a great Manager. One of the first Directors and then became the Manager. I think the place got the better of him. Great motivator, worked very hard.
So what was his main contribution do you think?
JP: I think just setting up the office and running it. Basically he and Maurie Daley ran the office with probably one or two girls for years. It involved very long hours and a hell of a lot of work and I just don’t know how they did it, quite frankly. You wouldn’t do it these days, you wouldn’t get people to work those sorts of hours. I am not sure whether that is good or bad, I think somewhere along the line we have lost something.
How about Maurie Daley and Stan Brown?
JP: Yes. Well I have known Maurie better than Stan actually. When Owen was the Manager, Maurie looked after the books.
How was he?
JP: All right, he was just another clerk with some basic knowledge. He is not an accountant, no true accountancy training. A lot of natural intelligence. Not much formal education. Another one of those who has come good and seem to run the movement these days. Maurie and I had a fairly close relationship mainly because of my accounting knowledge which he lacked. He used to lean on me and regard me as someone he could seek advice from and basically I was always glad to give it, I saw that as part of my role. Maurie has been a great Manager. I think he is getting close to retirement now. He has been one of the identities of the credit union, one of the identities of the Council. He will be a sad loss, once again, when he goes. They are all starting to get old and once again that is a problem that the credit union has got to face, basically most of this Board and the Senior Management are starting to get close to retirement. I worry sometimes about a movement that still refers to me as one of the younger fellows and I am forty-eight. I find that a little worrying.
Do you think they have been remiss in not bringing the women along into the movement more in the top echelons?
JP: Yes. There are a lot of women in credit union management, not in this credit union but generally, even to the top CEOs. Not too many women, or not as many women involved at Board level. I am not sure why. Maybe it goes back to not bothering to invite them, probably that was true in the old days didn’t want any non-drinkers on there or people who interfered with the language. You wouldn’t ‘cop the sheilas being on it,’ to use some one’s words, not mine. I think they have missed the boat a bit. Even the credit union I know work for, Teachers’, who has 60 per cent of its membership as female have been unable to attract females on to the Board.
Have they ever tried?
JP: Yes. In fact some females have stood. Basically it is because the credit union is running fairly well and the Board doesn’t change, male or female it doesn’t really matter much. I think once the Board members start to get on and start to retire in any large numbers then I think the pressure is on to get a female and I think they should try to get one, even if they have to shanghai them.
Well I think we have nearly covered the ground in one way or another. Do you think the setting up of the Travel Department was a good idea?
JP: I think it is a good idea as long as you don’t look for it to be a profit centre.
So what is its purpose?
JP: I think it is to provide a service. Basically if it provides that and doesn’t cost us too much to run it, that is fine. It is like any service you run, most of which do not run at a profit, they are not supposed to.
Well that is not what credit unions are supposed to be about anyway.
JP: That’s right, they are ‘not for profit’ organisations. There is no reason why every service that you offer should be a profit centre. I believe in some degree of cross-subsidisation and I don’t see anything wrong with it, quite frankly.
Did your work for the credit union take a toll on your health or family life?
JP: I didn’t take a toll on my health, or not that I remember. I probably drank and smoked too much, but you overcome that and you probably would have done that anyway in some other form. Family life, no, although as I said before I would have to say it probably affected some of the relationships along the way before I got married. It certainly hasn’t affected my marriage, although I have had to be careful not to let it affect my marriage. I have taken conscious steps.
Any regrets?
JP: For being in it? None. It is great. Probably in later years if they will still have me I will be there.
What else do you think we need to discuss, anything I haven’t asked you?
JP: No. I think the history of Sydney Credit Union will also supply a large amount of the history of the movement. As I said earlier, Sydney Credit Union, not so much now, has been enormously influential in the development of the State body, of the national body and to a large extent also of the international body. I am quite proud to be a part of it.
There is one area I haven’t asked you, that is overseas trips?
JP: I haven’t been on any overseas trips with this credit union, but I have been through my work with Teachers’. I went to America in 1981 and Canada. Basically went there to have a look at education-type credit unions. We learnt a few things, but I would have to say these days I believe the Australian credit unions are the equal of any in the world, particularly the good ones. As far as I am aware we are as good as any and probably better than what we think we are. I think we are overly self-critical. When you look at some of the banks, Australian banks in particular, we have bankers out to visit particularly at Teachers’ they come out to have a look, and quite honestly they can’t believe the level of service we provide, can’t understand how we do it. Sydney is no different. I am happy about that and I hope the members are.
Well on that note we will close. Thank you very much John Prescott.
End Tape 1B: 4664 Words: 1 hour 40 minutes