24 APRIL 1994: WA2: RICHARD RAXWORTHY TALKING TO DOUG CALDOW

What is your full name Mr Caldow?

DC:      Douglas Ian Caldow.

What year was you born?

DC:      1933.

Whereabouts?

DC:      In a little town called Three Springs which is about two hundred miles north of Perth.

Right. Did you go to school there?

DC:      No. I went to school in Perth.

So where did you grow up then?

DC:      Oh I grew up in Perth. I was born on a farm but unfortunately it was Depression times and my father suffered two bad accidents one after the other. This caused us to leave the farm to come to Perth when I was just a child, a baby actually.

So you actually grew up in what part of Perth?

DC:      In North Perth.

Right. Where did you go to school?

DC:      Highgate Primary School initially, then Perth Boys’ High School.

What sort of influence as a child from your family and from the school do you think? What did your father drum into you? What did you get from them?

DC:      Well I think we had a very close family group. In those days there was a lot of emphasis on the family, the family as a group and caring for one another. I think that was a very strong influence which has carried through into my life anyway.

Did you father actually have that farm and did he lose it?

DC:      Yes he lost the farm.

That must have been a bit of a blow to the whole family, I mean to you as well.

DC:      Well see I was too young. I was only a baby. I have a twin brother, Bill and we were the last of five children. I have two sisters who are ten and eleven years older than me and a brother six years older. Then Bill and I arrived.

Where did you first go to work?

DC:      Well I worked with the Post Master General’s Department for a number of years.

What as first?

DC:      Well initially as just a telegram boy.

A messenger boy. Did you have morse?

DC:      Oh yes. I learnt morse code.

Did you have to do the telephone exchange at night?

DC:      No, never did the telephone exchange at night.

I have heard a lot of stories about that from different people, especially big exchanges.

DC:      Yes well I actually trained as a postal clerk. I was due to the go the country but my national service intervened in 1951, 1952. I went into the navy. Had six months in the navy.

You must be the same age as I. Just one year younger actually. Right. One year in the navy?

DC:      Well we had six months in the navy. We were due back in to do national service I think a fortnight a year for seven years, but the government changed the rules after our second year and we didn’t go back again. So we had a six month course and then two fortnights after that and then no more.

You went back to the Post Office did you?

DC:      Yes went back to the Post Office. Well I actually trained as a postal clerk. I was seventeen I think, which is fairly young in those days to graduate as a postal clerk. I came back and I worked as a postal clerk for just a short time. In those days they had what they call the Commonwealth Third Division examination. I passed both Postal Clerks Third Division examination and the Commonwealth clerical examination, which allowed you to become a Third Division Officer in a clerical position, in the same year. After those I was actually appointed to a position within what they called the Postal Services Division. I actually worked in a number of clerical positions mainly in the Post Office’s branch but I was on relief so I worked in the Mail Exchange Branch and Transport Branch.

Where did you first hear about credit unions?

DC:      I was always interested in the Postal Institute as it was in those days. The Postal Institute formed in Perth a small credit union around about 1960, 1962 in fact it was. So the credit union now is about thirty-odd years old.

Were you at the foundation of that credit union?

DC:      Not at the foundation, but I have got a very low number. I was one of the very early members of the credit union. Actually the story unfolds this way. Having passed those exams and having some time as a clerk, the old PMG Department, as we knew it, started what they called an integrated training scheme. What they were doing was to equip people to become the future managers of the organisation specialising either in mail exchange work, postal work or telecommunications. As it turned out I thought the future was telecommunications and I was lucky enough to be selected into one of those groups in the early 1960s. We were basically taken out of the workforce and trained in all forms of management practices for about two and a half years. It was a super time. I mean we were actually trained how to become managers. They were great people to work with and a highly motivated group of young men as they were then. The system was rather strange. While we were given these expectations it seemed that the people who were back there making decisions on who they would have in their management positions decided that these upstarts wouldn’t quickly come back into their organisation and upset it. We had some difficulty in being placed in positions that had potential and used our talents, if you know what I mean. Ultimately I decided that well the job I had after this intense course wasn’t really very satisfactory. Then I had an offer to go to Geraldton which is three hundred miles north of Perth.

As what?

DC:      I was the person in charge of the Telecom Sales as it was then. I had an area from Gingin which is about sixty miles north of Perth, across to Wongan Hills and then everything north of there.

Most of the State.

DC:      Well it was most of the State, yes. We were running it from Geraldton. I went in 1966 and 1966 was a particularly significant year for Western Australia because that is the time when Government signed those contracts with the Japanese to develop the iron ore hills. There were towns like Dampier and Tom Price and Pardelup and so on, some of which were on the drawing boards. In fact I went to all of those towns when they were just turning the first sod. In those days the towns were company owned and what we call closed towns. One of the sensible decisions that was taken at the time was that the Government decided that the telephone exchanges that were installed in these closed towns by the mining companies had to be capable of being integrated in the future into the national grid. That actually happened in due course. But I worked there from 1966 to 1972. It was a dynamic time, just a marvellous time. Dealing with multi-nationals and you could really feel as though you were doing interesting things with your life.

On the other side of the fence, we were looking also after West Australian people, many ex-servicemen who were wanting to develop farming properties under this conditional purchase scheme that was going at the time. Basically the farming community was somewhat south of Geraldton at places called ??????????, Dandaragan, Badgingarra. That area which now has the Brand Highway running through it. It was really isolated from telecom services as late as the late 1960s, unusual as it may sound. So my job also took me to that area where I was developing what they call the initial trunk outlet project to get the trunk line service into those towns and establish a small telephone exchange, country automatic magneto, to serve those areas. Ultimately of course the cable came through first from Perth to Geraldton, then from Geraldton to Carnarvon and ultimately from Carnarvon to Port Hedland. I had the job of talking to people who were on that line and arranging for them to come of the old magneto exchanges and on to the more modern systems. Obsolete by our standards today but very modern at the time.

While I was in Geraldton I actually got myself heavily involved with the Postal Institute which had some holiday homes in the town. I looked after these on behalf of the Institute and I was President, Treasurer, Secretary, you name it, in all the six years I was there. Of course the involvement with the Institute brought into focus the credit union and what it was doing in those days. Ultimately in 1972, it was, I was asked to come back to Perth and I did basically for family reasons. By this stage my parents were both dead and we had two young daughters. Mona’s parents were still alive and they were getting on a little bit in age and we felt it was perhaps appropriate that we came back to be nearer Mona’s parents and to expose our two daughters to their grandparents. We loved them dearly of course.

Anyway, I am digressing a little bit. When I came back into Perth that I learned that the credit union for the first time was looking for a Manager. I thought well here was an opportunity to do something different with my life and I applied for the job. I was appointed to the credit union when it had less than $3 million in assets.

That was the Postal Institute Credit Union?

DC:      Yes it was called the PosTel Institute Credit Union. I am using the modern term. What did we call ourselves then, we have had a number of changes, we were the Postal Institute Members’ Credit Co-operative Society Limited. That was subsequently shortened to API Members’ Credit Society Limited.

Who wanted to change the name?

DC:      Well you see in the meantime the PMG Department had broken up into Australia Post and Telecom. The Postal Institute had shortened its name down to API in terms of the way in which it projected itself. It seemed appropriate that we became the API Members’ Credit Society. It was really a Board-initiative.

What year did you become Manager there? You are still there of course.

DC:      Well I was the Manager in 1972, 1973. I became the Manager in 1973 of this very small credit union when the Institute decided it needed someone to manage this growing credit union. At that stage it was approaching $3 million in assets. I have been with them ever since. I guess it has been a delightful twenty-odd years. I have seen the credit union grow from being a little unit to now a company with $100,000 worth of assets. From being hardly involved in any technology at all in the way credit union was then run to one which I now call hi-tech, hi-touch.

What about the State scene? When did you become involved with the League or the Association?

DC:      Virtually right from the outset.

Was it called the Association when you became involved, or was it still the League?

DC:      We were called the Credit Union Association of Western Australia.

So the League had already sunk itself and the other one had been born?

DC:      Yes.

Right. Were you aware of the circumstances of the demise of the League?

DC:      Yes. There was some problems with support. In those days there were many more credit unions than we have now and there were factions within the credit unions. Those who wanted to support the Association and those who wanted to stay independent of it. In particular we had factions that really didn’t want to belong to AFCUL.

I was talking to Dennis Hagan you see and I said something to him which provoked a reaction in him. He hadn’t been aware of what I was going to ask him and what I asked him was this, I said, ‘Were you aware in the early days of AFCUL there that Dermot Ryan was Chief Executive Officer and he got in strife lending money to Western Australia without the Board’s approval without any paper work?’ He said, ‘That rings a bell somewhere.’ He said, ‘I wonder whether that was to do with our credit union when we had the defalcation?’ I said, ‘I don’t know, but Dermot Ryan got in strife over it when he was in trouble over other matters as well.’

DC:      Well I was never aware of that. But Dennis Hagan’s credit union had a Manager by the name of Smith, you probably know the story.

Yes. He is the one. There was a bigger one in Sydney than that and a sillier one too.

DC:      But there were some difficulties. We also had some factional groups, people who wanted to be parochially Western Australian. Couldn’t see that there was a need to pay subscriptions to a national body when we were in Western Australia under a Western Australian Act, you know what I mean? They really couldn’t see that there was any value or merit. It took a while, I must confess, for those views to be dissipated as people realised that we really were a national movement and there were going to be issues that would require national rather than State resolution.

Did you get involved in the insurance split at all? It happened in New South Wales and spread to Victoria.

DC:      No, not at all.

What was your credit insuring with?

DC:      How do you mean?

Well was it insured with CUNA Mutual in the first place, or not?

DC:      Oh yes. We have always been with CUNA Mutual.

You stayed with them did you?

DC:      Stayed with them, yes.

All the way through?

DC:      Yes.

That is interesting. Even when the Association didn’t use them?

DC:      Well that’s right. We used them all the way through.

Right. I know people did and still stayed with the Association. What about the Association, I mean what were your first involvements with that?

DC:      Well I was elected to the Board of the Association.

Straight away?

DC:      No not straight away, but shortly thereafter. My gee I just forget when now, it seems as though forever. I have always been involved with the Association and was the Western Australian rep off and on in the early days attending some meetings in Sydney with AFCUL and so on.

I have got a problem incidentally with Dennis Hagan that I haven’t yet asked him about because I only looked up the paper work after I finished his phone call. He mentioned that he was Vice-President of AFCUL and he chaired a couple of AFCUL meetings in Perth and in Canberra. He put down 1981, but in 1981, 1982 Western Australia didn’t have any delegates to AFCUL. What is more the meetings weren’t in Perth or Canberra. So then I go through to 1985 and we haven’t got the Canberra ones then or the Perth ones. So he has got me baffled.

DC:      I know that there was one AFCUL meeting in Canberra where Dennis was the Facilitator.

Yes, he didn’t say he was Vice-President he said he was Chairman.

DC:      You would have to ask him about that.

I will get back to him next week.

DC:      I can’t tidy that up for you.

Now what about your involvement?

DC:      Well my involvement has been basically I was in the Western Australian Association. I was either a Councillor or Secretary. Most of my work was as Secretary. I had that job for many years. I really can’t tell you when I started and when I finished, but it would have been a stretch of about eight or nine years. I did that almost continuously in the days when we really had very limited resources at the Association at all. We had no paid employees so that was sort of a job that I did and nobody seemed to want it.

Did your office become the Association’s office?

DC:      Yes we were the place where the correspondence was directed and so on.

That is not uncommon.

DC:      That changed of course with the appointment of Brian Paterson.

Who I understand has taken a package now?

DC:      Yes he has just taken a package. Of course the growing sophistication of the systems, we just needed somebody to deal with that. We did have a person on a sort of a part-time basis before Brian, but it was fairly low-key if you know what I mean.

What about central banking? When did that start and who started it?

DC:      Central banking? That really only got underway with the AFCUL people. It wasn’t really until Project Renewal that we got into central banking in a big way here in Western Australia with the CUSCAL system. What we did do once we had Brian on board, the Western Australian Credit Union Association developed two companies. One called CUTM, Credit Union Treasury Management, and the other one called CUATM, Credit Union Automatic Teller Machines. They provided an excellent framework to support credit unions in lots of ways.

Were these in conjunction with AFCUL?

DC:      Oh yes. But we were independent of course in those days. The companies were owned by Western Australian credit unions. Under Project Renewal the transfer of engagements went to CUSCAL, or CUFSAL as it was then, with the development of Project Renewal. For a number of years those companies operated profitably and well for the user credit unions. CUTM provided a limited treasury service and did it quite well actually for the credit unions in Western Australia. CUATM of course became the facilitator that allowed the credit unions to break into ATMs.

Were you involved at all with the GCS boys before they took it over to New South Wales?

DC:      Yes I was. In fact I was one of the initial people to assist the GCS guys in the development of those computer programs. We had an awful system in the old API Credit Union. We were actually using a bureau facility owned by the Western Australian Totaliser Agency Board. A number of credit unions had this. Andy Phelan and Nigel Gallop were both employees of that organisation and saw an opportunity to develop a suite of programs to assist credit unions in the way in which they managed their affairs. They started speaking to people like myself and others who were around at the time, asking us what we wanted. We used to meet with these people frequently either collectively or individually.

Was this Andrew Phelan, Nigel Gallop and Brian Dean?

DC:      Brian Dean, yes. We met with these people.

Brian Dean didn’t work at the TAB did he?

DC:      No, Brian Dean worked for the R & I Bank, the Rural Industries Bank. At that stage I believe he would have been the DP Manager for the Bank.

That’s right. I have already interviewed him.

DC:      Let me try and think of the date, it was around about 1985 I think it was.

Oh my goodness no.

DC:      Earlier than that.

About ten years earlier. They took it to New South Wales in 1978. In fact it was already set up in 1978.

DC:      Well we were the fifth credit union in Australia to go on to the GCS system, the API Members’ Credit Society.

Was that still in Western Australia at that time? Or had it gone all over by that time?

DC:      I think they had sold one or two systems into the eastern States at that stage.

What happened, I believe, that Defence got one. John McIntyre was an ex-policeman and he was also involved in the AWA Credit Union, he was the Manager there, so they were using the same hardware. The next thing it was offered to him. Of course his wife got it as well. So that was two and so it went on from there.

DC:      Well we were the fifth credit union which took the system on. If I recall correctly the actual system was developed at the CSA, Civil Service Association Credit Union.

That’s right.

DC:      That would have been about 1978.

I would think it would be 1977 actually. They would have had to have a year, you know. Might have been the beginning of 1978.

DC:      I think we went on early in 1978.

It went mad over in the eastern States by the end of 1978. There was one after the other. What happened was Geoff Cambridge got to hear of it. I don’t know whether you realise, but Les Robinson had a heart attack and retired and he was looking around for something. He latched on to that and took it over to the east. He became in a partnership with that to sell it you see. But of course the League wouldn’t let him keep it. Once they started trying to sell it over there and the world was out, the League wanted to be in it. So that was FCS and it has been a joint partnership ever since. But you were right CSA was the first.

DC:      CSA was the first and I know we were the fifth. I know we were the fifth credit union to go on and we had a small Reality computer, AWA Reality. It was like Manyana. It sort of revolutionised the way in which credit unions operated, that system. It has stood the test of time but now needs to be either completely rewritten or revamped in a way that makes it meaningful as we moved forward from here towards the year 2000 and beyond. That was an interesting time.

Now what about Savings Protection Funds?

DC:      Western Australia was never too keen about Savings Protection Funds.

What, the Association didn’t have one?

DC:      Didn’t have one. No. We didn’t have a Savings Protection Fund. In any case the failure of the Teachers’ Society.

Well that was a lot later.

DC:      A lot later, but whatever would have been in the pot wouldn’t have been enough to handle a recovery situation for Teachers’. But that is another story. A complete story in itself.

Incidentally, what about the other end of this. I mean they had no Savings Protection Fund, OK, what about the Act? When did you get a Credit Union Act? Did you have anything to do with that?

DC:      Yes I did. In Western Australia there was the Friendly Societies, no let me get this correct, it was the Co-operative and Friendly Societies Act of 1903. Now that Act remained in force virtually unchanged until 1979 when the Western Australian Credit Unions Act was enacted. That was proclaimed early in 1980. So once that happened that was the first time that there was any real legislation governing the way in which credit unions operated in Western Australia.

Did that have a compulsory reserve with it, or not?

DC:      No, it did not.

I see.

DC:      There was a lot of opposition to it, to having a Savings Protection Fund.

Yes but Savings Protection Fund was organisation by the Association of the Leagues, whereas a Reserve was organised by the State as a government body.

DC:      Yes.

End Tape 1A: 3924 Words: 1 hour 40 minutes.

24 APRIL 1994: WA2: RICHARD RAXWORTHY TALKING TO DOUG CALDOW

DC:      Now let me try and get my facts right, I mean so much has happened. With the enactment of the legislation in 1980 I tend to think that once the Act was proclaimed in 1980 it may not have had a Savings Protection Fund in it. I think that may have come as an amendment, but I will have to get my facts right. Certainly we did have a Savings Protection Fund and I became a member of the Board of the Savings Protection Fund.

I think it was called a Stabilisation Fund at that stage of the proceedings.

DC:      Yes that’s right.

I was looking at the legislation.

DC:      I was a member of the Board for a while of that Stabilisation Fund.

Now did you stabilise any credit unions?

DC:      No. No we had no need to do that.

Were you allowed to lend to organisations outside the credit union movement according to that Act in 1980?

DC:      No, only to members. If a corporation became a member

A corporation could become a member?

DC:      Yes. I would have to check that. That is what happened with the Teachers’ Credit Union. They were taking on corporations.

Yes I know. But he went to gaol for a while didn’t he, so that was illegal.

DC:      Yes. They had all sorts of funny rules, Teachers’.

Did they?

DC:      Yes, they sure did.

Of course the same problem happened in the building society movement back in the 1880s. They were allowed to trade in land and brother they did.

DC:      Yes. I am just trying to think. I think the credit union that got heavily into corporate lending was Teachers’ Credit Society and there was another credit union. When you asked me about that Stabilisation Fund, there was some funds lent to a credit union in Perth to assist them over a difficult period. They were into corporate lending as well.

What about the uniform Credit Act, were you involved with that all?

DC:      Yes I was involved. There were a lot of discussions on the uniform Credit Act.

With whom?

DC:      Through the Association and government.

What the Western Australian Government?

DC:      Western Australian Government. You see we have our own Credit Act here in Western Australia.

Of course you have. It is uniform in each State in the Commonwealth now.

DC:      Oh I am going back before the uniform Credit Act, I am going back to the Western Australian Credit Act.

Now did that come in before the Queensland one?

DC:      I can’t tell you the timing. But we have had it in here since about 1986 or 1985.

I will have to look it up then.

DC:      The Credit Act was a whole new ball game, the one I am talking about, not the uniform one, but the Credit Act. It controlled the way credit unions had to lend in Western Australia.

Were they allowed to corporate lend?

DC:      As long as the credit union allowed corporate members, then you could lend under the Credit Act. But the Credit Act in Western Australia had some strange features about it. For example, if the amount was in excess of $20,000 it was exempt from the Act, because it was only looking at personal lending if you know what I mean. If the interest rate was less than 14 per cent, because interest rates were fairly high in those days, it was exempt. If loan that was made was secured by a registered mortgage it was exempt. So there were some exemptions from the Act. But if the lending was captured you then had to comply with the rules of the Credit Act. What it did in Western Australia it forced credit unions to have two lending systems, one for what we call regulated loans and the second for non-regulated loans. That further complicated our systems, if you know what I mean.

Regulated and non-regulated, right.

DC:      A regulated thing, those captured within the terms of the Credit Act, and non-regulated which of course were exempt. It is still that way today.

Surely not.

DC:      Yes it is. It won’t be until the uniform Credit Act comes in.

Hasn’t it come in yet?

DC:      No, no. The national uniform Credit Act is now still being developed. CUSCAL are the people who are doing it on behalf of the Associations nationally on this. As I understand it, it will follow the path of the template legislation where you will have the Bill actually passed in Queensland, I think it might be. By template legislation or application of laws the same legislation will be adopted in every other State in Australia apart from Western Australia. Western Australia will legislate to replace its present Credit Act with uniform credit legislation but it will not be adopted under the template legislation system.

I thought that was all through?

DC:      Well the legislation is not even before the House yet, I don’t think.

I am getting all stuffed up. It is lucky I talked to you isn’t it. Well of course Graham Macleod would straighten me up on that. He is probably involved in negotiations himself. There was a Stabilisation Fund?

DC:      There was a Stabilisation Fund and still is, the Stabilisation Fund in Western Australia.

Now some of the other things during the period. Once you came in with AFCUL, with all the ATMs and all the products they brought through from AFCUL, was there anything special that happened in Western Australia?

DC:      Well no not really. We had these companies CUTM and CUATM and really the transition to working with CUSCAL and CUFSAL was reasonably smooth. ???????? to the credit unions in Western Australia because the system of remote delivery through the ATM network just carried on, but we were now dealing with Sydney rather than Perth, if you know what I mean. The system of liquidity management carried on as before except we are now operating and placing our funds with CUFSAL in Sydney rather than with CUTM here in Perth.

What about the credit unions that weren’t in the Association?

DC:      Well fortunately as the number of credit unions in Western Australia had truncated, I think we peaked at about thirty-seven and went down to seventeen today, there had been a lot of work done around about the Project Renewal time to get all credit unions affiliated and that actually occurred. So we now have in Western Australia 100 per cent affiliation.

That is peculiar isn’t it? Even in New South Wales we have got plenty of the other mob.

DC:      After standing aside for some time, I think Western Australia was probably of all the States in the forefront of being those best placed to transfer engagements to CUSCAL and CUFSAL because of the way we had organised ourselves. One of the things that happened was that when Teachers’ failed in Perth it was a great sobering thought, I guess. It sort of made credit unions take stock of where they were at. Almost to a man I was going to say, but every credit union decided that they were not going to be the next cab off the rank. They made a very strong effort from that time forward to build capital obviously and systems that made certain that they were prudential and seen to be prudential in the markets in which they operated. There was one exception to that, but the majority really did operate.

Fremantle?

DC:      Well Fremantle was one, but later United. I am lumping Fremantle and United together. Fremantle was backed into United and United subsequently needed the support of credit unions nationally.

I have interviewed Pat Taylor.

DC:      To get it out of a difficult hole, so you know the story.

Well to some extent. But I have got different views. Incidentally did you have a lot to do with the Registrar?

DC:      John Mataxis, is that the one you are talking about?

Well the one doing the Teachers’ and the Fremantle.

DC:      Bruce Brotherson was the initial Registrar who gave Teachers’ far too much licence to operate. Then subsequently poor old John Mataxis came along and inherited the real difficulties at the time it failed. He was actually in that position.

Do you feel that he gave the credit unions sufficient support at that time?

DC:      John Mataxis? I believe that John has been unfairly treated by some of the credit union people. I always found John to be right down the line, but other people argue differently. I found him reliable, supportive and an interesting guy to work with. Other people have got a totally different view.

Right. What other subjects haven’t we covered? Your involvement with AFCUL itself?

DC:      Well yes. Under Project Renewal I was appointed, or elected, to the Membership Council in the second year. With that appointment I was subsequently elected by my peer group, the Membership Council, to the Board of CUSCAL and CUFSAL and am now about half way through that three year term.

So Project Renewal, as it went through, who was doing the pushing and who was doing the work behind the scenes?

DC:      In Western Australia?

Yes and also from the national basis as well.

DC:      Oh well of course it was Reg Elliott’s dream to change the governance system. He and the Executive Management convinced the Board of the day that there was a need to get some consultancy work done on that and PA were selected to do the job. In fact Vern Harvey, who is now the Chief Executive, was the person who was in charge of the project, Project Renewal.

Now where was he based at that time?

DC:      I am sure he was based in Sydney.

Who were the people who were based in Melbourne? I have heard something about the social engineers from Melbourne. I don’t have an idea who or what they are. It may be just a quotation.

DC:      No. I am pretty certain that Vern and his team were based in Sydney.

Yes well I know them as Sydney as well. I mean originally they were a computer bureau amongst other things.

DC:      I think it was Reg Elliott’s dream of course to change the governance system. He felt that we had three tiers and perhaps only needed two.

What about Western Australia then?

DC:      Western Australia was very reluctant to accept the concept of Project Renewal.

Including yourself?

DC:      Well at the initial stages yes. But we changed our mind believing that at the end of the day, and the way I could see things developing, there was little point in having a parochial Western Australian system. If the credit union movement was to progress and grow and prosper it needed national solutions. For example, I tend to believe there is little point in having State Savings Protection Funds. In themselves they are too small, collectively they are something that you can hang your hat on.

You have got a situation in New South Wales that you have got hundreds and hundreds of little organisations that have got to be supervised by somebody. Surely the national body can’t do it?

DC:      No. I am just talking about the Savings Protection Fund that is stipulated within the legislation.

It is not only that, there are building societies too, there are thousands of them.

DC:      Oh yes. Look I am hearing what I am saying but I think you build one system and then you outpost people into the States to do the work.

Well they are doing that aren’t they?

DC:      The Supervisory Authorities that are set up under AFIC, while they have common legislation are very much influenced by State needs, if you know what I mean. We expected to build a system which would be common throughout the nation but you find now that there are variations occurring because solutions are sought at VICFIC, of WAFE or QUFS, or whatever. So variations are coming already. There was an inevitability about that. But I do think if you are going to have things like Savings Protection Funds why not martial the resources across the nation and find the vehicle to manage that on behalf of the credit unions.

The Reserve Bank?

DC:      Well it could be managed by AFIC, for example. It could be managed by CUFSAL. After all it is credit union money.

Well the Commonwealth Bank is one of my clients history wise. I do interviews with their tip top people and of course I get to see a lot of Reserve Bank people because the Reserve Bank started out in the Commonwealth Bank. So I have lots of arguments with them too. I have a lot of fun there.

DC:      But it seems to be silly, in my view that we have a separate regulatory authority. Now of course there are arguments starting to emerge where the banks are supervised free because the Reserve Bank is government-funded and it does not charge the banks for the supervision they receive. The credit unions now are actually paying for this supervision by way of paying dues to a State’s Supervisory Authority and a levy to AFIC. So there is a certain inequity there that is now starting to gather force and I am not sure where that will lead us ultimately.

The other thing I wanted to say about this, the banks have recently had adopted a Banking Code of Practice. The credit unions are in the process of adopting a Credit Union Code of Practice which is very similar in form to the Banking Code of Practice. In fact it was modelled on it. But the controlling authority is the Reserve Bank. Now here we are, we are trying to start a system that regulates credit unions under AFIC and the very first time there is a new piece of legislation, or new system being adopted, I don’t think this is under legislative control but by agreement, but the very first time it comes into force guess who is the regulator for the Code of Practice. The Reserve Bank.

This is so old it isn’t true. I remember this push started back in the 1960s in America. It was called Truth in Lending in those days.

DC:      Well of course the truth in lending is of course the impetus that got the Credit Act going in Western Australia. But this Code of Conduct is something different again.

But credit unions were the worst in the world in the first instance. The interest rates they used to charge. Anyway let’s not get on to that. One area that I want to ask you about that I don’t have much information on, that is the pushing through of uniform credit union legislation. Were you involved in that?

DC:      Only from a Western Australian point of view. Attending meetings to discuss certain aspects of the legislation in its development.

So who pushed it nationally?

DC:      Well CUSCAL has been pushing it nationally.

Right, but before CUSCAL?

DC:      Before CUSCAL. In the days when AFCUL was there. I mean it didn’t make sense, again it didn’t make sense. Ask Graham Loughlin he will probably be able to give you a better history on it than I. But it didn’t make sense to me to have pieces of legislation that were being developed in Queensland or in Victoria or in Western Australia which had the same general thrust but had different provisions in them. It just made it almost impossible for credit unions that wanted to operate outside the State to have a different piece of legislation over its shoulders than it had in its home State. It is bad enough having two systems but to then have to adopt a third system because you now operating in Victoria or Queensland is just crazy.

Well of course the Registry in New South Wales has been pushing for national legislation since the 1960s.

DC:      It does make sense though, obviously.

Charlie Butler came back with his little red book there way back in 1970 something, just after the Act had gone through in 1969. He had been to American and he was on about uniform legislation over there, amongst other things of course. It became policy in New South Wales at that stage in the proceedings. Did anybody take that on board in Western Australia at that time?

DC:      No I don’t think so.

I have seen his little red book all over the place, so he must have got everywhere.

DC:      No I can’t recall that having any bearing.

Now some of the people that I know of in the east who have been involved at a national level, and I am pumping you here, Graham Loughlin what was his main contribution?

DC:      Well Graham started off in South Australia. He actually worked for the South Australian Government and I think probably as an adviser and doing some drafting, something like that. I am not sure how he got involved with the credit union industry but from there he was picked up and went into AFCUL. He has been with them for many years.

So what was his contribution in AFCUL, to your knowledge?

DC:      Well he’s very good on legislative matters. Has made a very strong contribution to getting some balance in legislation that was proposed to control credit unions. I think Graham has done a remarkable job.

So he is someone I need to talk to in Sydney. What about some of the others? What about Reg Fowler?

DC:      Well Reg, I am not sure of his early history but I think it is accounting, he would have been with the New South Wales Association.

Yes he came with Reg Elliott.

DC:      I think he has just celebrated twenty years in the credit union movement. Certainly for the last many years in senior executive positions either in AFCUL and now CUFSAL.

Did you have anything to do with Malcolm Mackellar?

DC:      No.

Kevin Murray?

DC:      No, not at all.

OK, thank you that covers that. Now what haven’t we covered. Western Australia?

DC:      In Western Australia people that were basically involved in the industry. Dennis Hagan had a lot to do, he was Chairman for some time of course and involved in the Association. A fellow by the name of Robert Weir, who is the General Manager of Energy Credit, has shown a lot of interest in national development and has been on the Board. He was on the Board of CUSCAL before me for a short time.

What was his contribution at the Association level?

DC:      Robert was President I am sure. He was President for a few years following Dennis Hagan I would think.

Anybody else? What about Arthur Carter?

DC:      Arthur Carter, good heavens that goes back a while. Arthur was Chairman of the old Fremantle Credit Union. Must have had a long history with them, probably extending over twenty or more years. He bowed out of the industry round about the time of Fremantle transferring its engagement to United. He was a bit of a character in his day. A fellow by the name of Elliott, Health Services Credit Union. You forget names after a period don’t you. He was a driving force for the Health Services Credit Union for a number of years.

How about Johnny Byrnes, Stan Hardy, Michael Grace? I have got David Shepherd.

DC:      David Shepherd was Chairman for a number of years.

Of the Association?

DC:      No, just of my credit union, yes.

What about Cec Bogg, CSA?

DC:      Cec Bogg was there for many, many years. Cec’s background was in the Titles Office of the State Government. He occupied a fairly reasonable position. But he would have been on the Board of CSA for many years until his retirement a short time ago. He must have clocked up goodness knows how many years as Chairman of that credit union.

What about Fred Menby?

DC:      Fred Menby was Railways. That was backed into CSA Credit Union.

Why?

DC:      Because it would have had some difficulties had it not happened.

Why?

DC:      Well because Fred just simply didn’t have the management skills to keep it on track. I mean it was one of those classic cases where you get a happy volunteer in a position and he doesn’t grow with the company. One of those classic cases.

Have you got any more names of people you think made major contributions? Can you think of anybody in Western Australia who was good in the legislative area?

DC:      No it was done basically collectively here in Western Australia.

With the Registrar?

DC:      More likely through Brian Paterson’s office but in discussion with the Registrar and other government people. There is one person that the history wouldn’t be complete without and that would be Fred Hewitt. The Police and Nurses’. Fred took over the Police Credit Society it must have been a decade ago. The credit union was just donking along at that stage. Fred has turned that credit union around to be one of the most prudentially sound credit unions in Australia. Certainly it is a very highly profitable outfit. I think it has assets around about $160 million and I would be surprised this year if he didn’t turn in a profit of $4 or $5 million. Highly profitable organisation. He runs a subsidiary companies extremely well. So he is providing a one-shop stop.

Has he got building societies?

DC:      Yes he does. He has got a building society, a terminating building society, under his control. He has got travel, insurance, real estate, you name it. Property control. He manages that credit union very well indeed.

Doesn’t have funerals as well does he?

DC:      You had better speak to Andrew McCagren about that.

I heard. I give him a chip every time.

DC:      As Andrew says, we are the last one to let you down.

I said to him I am just going into hospital for a heart by-pass, can I join your credit union for the funeral benefits? He had a bit of a laugh.

End Tape 1B: 3713 Words: 1 hour 50 minutes.