ANSWCU 29: 11 MAY 1990: INTERVIEWER RICHARD RAXWORTHY: TALKING WITH KEN BYRNE
Where were you born and when?
KB: I was born in Sydney in 1935.
Whereabouts in Sydney?
KB: At Vaucluse.
Did you grow up around there?
KB: Yes, most of my life was spent in Dover Heights where I went to school and I left there when I was married in 1960.
What do you remember of Vaucluse when you were growing up round there?
KB: A very pleasant place to have spent my childhood. Many happy memories and it is a pity that the world generally can’t be like those days again.
What did you like or dislike about school?
KB: I enjoyed school. I probably wasn’t a great student, even though in later life I feel that I came good. Sport played a prominent part in the my school days.
What sort of sport, what kind, team sport?
KB: Well I was involved in cricket and football teams, but without boasting I excelled at athletics and represented the State as a schoolboy and in later life went on to run competitively with Eastern Suburbs Hammer Athletic Association and did that up until age 26, when I was married.
Did you do well at that?
KB: Yes, I represented in A Grade. In that particular period with the club we won a number of championships. A particular year from memory, and this is getting back, was 1958 when we won the inter-club competition with the likes of people like Dave Power, Michael Cleary, who are well-known Australian athletes.
What subjects did you like or dislike at school?
KB: Mathematics was not my forte even though I ended up qualifying as an accountant, which might be an anachronism in itself. But science, chemistry I did enjoy.
You were much like me in that case, but I never became an accountant. What about the teachers, did you get on reasonably well with them?
KB: Yes, I had a good relationship even though I did earn my number of wacks with the leather strap which were famous with Christian Brothers in those years. That is about as much as I can say on that subject.
Where did you go to work first when you left school?
KB: My first job was with a customs agent in Sydney, which I enjoyed, but I couldn’t see a great future. What did come out of that particular job was then I met my future wife, so I must say that as a starting point in my life it has vivid memories.
What job did you do then?
KB: I then went into a number of insurance companies and that is where I started to study accountancy. That really gave me the urge to study, because I could see I wasn’t going to achieve much in life unless I did that. I took up the study of accountancy at the old age of twenty and I suppose I had a degree of maturity and that helped me to weather the storm and to eventually qualify.
Had you already done your National Service then?
KB: Yes. I went into National Service in August 1953 and was in the 12th Battalion.
So you were ahead of the game and you didn’t get involved in the Vietnam war?
KB: No, we were on the tail-end of the Korean war actually, which I think finished in 1951. At one stage we thought we might be part of the cannon fodder. But no, I missed Vietnam and am not sorry of course. It was a very interesting period the National Service, I think it made more people than it broke. But I had six years as a school cadet unit so I had a pretty good introduction to National Service.
So when did you qualify as an accountant?
KB: In 1962.
Where were you working then?
KB: I was working for General Credits which was a finance company associated with the Commercial Bank of Australia in those days.
Where did you go next?
KB: To Finance Corporation of Australia which was a subsidiary of the Bank of Adelaide. That was probably the most instrumental parts of my life in that they were an excellent company and they treated their staff very well. It gave me an introduction to a lot of areas of personal lending and mortgage work, commercial mortgage work, which certainly benefited me in later life coming into the credit union industry.
So when did you first find out about the credit union industry?
KB: Well it was an interesting one. It was 1958, my wife’s aunty had been a foundation member of a credit union called Earlwood Credit Union and in talking with her I wasn’t eligible to join that credit union, but through her Association I joined the Guild Credit Union in Pitt Street, Sydney. I joined that credit union in 1959 as a borrowing member.
What was the Guild Credit Union?
KB: It was probably based on members of the Catholic religion and I am being vague because all I knew about it was that it was a good place to borrow money for a young person that was going to be married in less than twelve months. I must admit I was interested in the loan, the rate of interest was good, what they were all about at that stage I was yet to discover.
So what happened re the Earlwood one?
KB: Well I went through still working within the finance industry over that period and really didn’t have much involvement in that credit union other than to repay my loan. But in later years, it was actually 1968, when I had come out of the finance industry a couple of years prior to that and went into business for myself, I bought and ran a newsagency in Sydney in Lewisham and spent two years in that business. Then I decided with a young family that there was more to life than just making money.
Why did you go into a newsagency?
KB: I always had the hankering, I suppose, to be self-employed, like a lot of people. I had a couple of friends who had been in the newsagency industry and it looked like a place where you could start working for yourself with a reasonably assured income and with my knowledge of accountancy I thought I had a fairly good combination to put together, which I think proved to be correct. But working the long hours that you did with a young family, as I say there was more to life than making money and I valued the family life and decided to sell.
Well, what next?
KB: Well, that is really how I ventured into the credit union industry, or to some of our more pure bred people, they like to call it movement. I came back to my wife’s aunty again, who was still an active member of Earlwood Credit Union and in visiting her one weekend, she said that the credit union was looking to find a manager. This is the interesting part, I suppose, I applied for the job and I went down one Tuesday evening to meet the Board and to cut the story short, we don’t want to go into too lengthy parts about this, but I came away with the Balance Sheet. I went home and sat down and looked at it and spoke to my good wife and I thought these people are mad. Being an accountant I went through their figures and I am looking at the thing in pretty basic isolation from a financial point of view and I just couldn’t see how they would make this thing work. But having had that prior experience, having known Edna’s aunty, who was a very persuasive lady, she said to me, ‘Look, go back and have a further chat.’ Well I did and I think they convinced me at that stage that this particular financial movement had a philosophical side to it totally different to what I had experienced in the finance world. They must have got to me on those philosophical grounds and I applied further, got the job and that was September 1969.
Were they in trouble? Were you right about their financial situation?
KB: What I was saying about the financial situation was not that they were in trouble, they really were in a sound financial position. But looking at a volunteer Board of Directors, this little shop-front operation which was probably fairly unique to the industry in those days because the bulk of the credit unions were certainly industrial, to my knowledge, it was just how could this little organisation borrow money, lend money without doing too much in the way of what I would see as checking out the credit rating of people, which was an unknown thing in those days. I thought they were taking tremendous risks. But that is where the philosophy in those early days, where everybody knew somebody within the industry, made it work.
Who were the founders of the Earlwood Credit Union?
KB: The founder of that was a priest who was instrumental with a number of the parishioners in those days, Monseigneur Clark I think had a lot to do with it, and a couple of other priests whose names escape me. People like Pat Lloyd, Kevin Nyland, Dominic Orivelo were instrumental people in those early days.
They weren’t anything to do with the Antigonish Movement were they?
KB: They had connections but I think saw through in their own way that the Antigonish Movement really was not the way to go.
So Father Gallagher was not one of the people who had anything to do with it?
KB: Well they knew Father Gallagher, as I did in later years, and Rose his sister. But what I found out later and what obviously those people knew in those days, they showed very good judgement in making the direction in which they would move.
In other words, they had dealings with the League and supported the League whereas the Antigonish people did not?
KB: Yes, well Dominic Orivelo was one of the Directors from Earlwood to the League in those days, so they had a fairly close contact with the running of the whole organisation.
So when you went there, as Manager, did you have any changes to make?
KB: It was interesting, because when I went there, there was myself and another lady and that was it.
How was it before you went there? Was there a Manager there before?
KB: Yes, the lady that I took over from wanted to take a step away. She had actually retired and the lady that was still there was a lady by the name of Moya Carthy who remained with me for quite a period of time. She was a great help to me in those early days and we went from there, probably for eighteen months, the two of us working closely together. That is when we looked at the situation and thought we could take this credit union further.
So where did you take it?
KB: Well we started to become more active in the community, taking it outside the bounds of the parish and looking for pay-roll groups and looking to introduce innovative ideas that at that stage had not really been used within the industry. One in particular which now plays a very major part within our industry is term deposits. Earlwood was the very first credit union, to my knowledge, in New South Wales to introduce term deposits in that particular period of late 1969, early 1970.
There are people who would argue that term deposits were the first step away from the philosophical purity of the credit union movement.
KB: Yes, I have heard all of that. Six per cent on loans, sorry twelve per cent on loans and six per cent on savings, or whatever it might be. That has always been an argument. But the reality of it is, if they were going to grow as an industry, or movement, and really provide services to people I think that was the beginning, not of the end, but of the start.
Yes, but it was a change.
KB: A dramatic change and of course like doing credit ratings on people was another thing that was very hard for the old-timers to accept. But I suppose I was a degree of new blood coming in and I had ideas different to a lot of the others because of my background. But I stuck to my guns through a lot of criticism in both those areas and I think certainly in the area of credit rating proven to be correct when you look at the difficulties that the industry went through in the ’60s and early ’70s.
What decided you to throw in your lot permanently with the credit union movement do you think?
KB: I suppose I had that blood transfusion that Bill Howe used to talk about. I can truthfully say that the philosophy appealed to me. The drive that a person could put into their days work and the satisfaction you would get in helping people was probably all that I needed as an individual to say that I thought I had a future and I thought the industry had a future.
And of course everybody has proved that it had.
KB: Well, I think I played my small part and hopefully I have and am continuing to do so. Yes I am proud of the achievements that we have all made, and in a small way my own achievements.
Do you remember any border arguments that you had with Sydney City Council Credit Union, when they were gradually enlarging and pushing up against your borders at Earlwood?
KB: They came in later years, but it never really worried me because they were insignificant as far as we were concerned. We had a very close membership in Earlwood in those days. No matter what they might have been trying, knowing the City Council guys very well I never had any problems. We had good relationships and the movements that they made in later years really were about the time that I left Earlwood. So the impact that they had around Rockdale, Marrickville areas really didn’t impact on me. I think it was inevitable. The changes were occurring in Sydney in any case.
I know they were encouraged to take over these credit unions, or to transfer engagements with these various other credit unions around the place, but was it touch and go whether Earlwood should be the one to take them over or Sydney?
KB: No, I don’t think so, because, as I say, that came at a later period when I had left Earlwood. We were involved in a number of smaller takeovers in those days. The rash of takeovers in Sydney really came after my departure.
Were you involved in any of the Schools or the Chapter or ICUD in those days?
KB: Yes, the South or West Chapter, I was heavily involved with Steve Birt who is well known within our industry. We played a fairly significant role in the education side of the Chapter which really came out of a trip which Steve and myself took to America in 1973. Steve was the Chairman of Earlwood Credit Union in those days and he was also working for the New South Wales Credit Union League. We were being sent by the Earlwood Credit Union to do a study of community credit unions in Canada and the United States. Following on from that trip, of course, we brought back what we saw as some wonderful ideas in promoting and educating Directors and staff and whatever. These were implemented and taken around to various Chapters around Sydney.
From that, was that sort of exported to the rest of the industry as a proper report?
KB: The ideas were novel, I suppose.
Exactly what were the ideas?
KB: Well there was a fellow by the name of Jack Schroder who Steve and I met in Canada and he had quite a role in the education field over there. It was done on felt boards which today would or course be frowned upon with all the modern technology. Small figurines which were backed with sand paper and put onto these felt boards. By visual display you were able to get your message across in so many different ways, compared with people standing and just sprouting which used to be the way in those days. You had this animation type thing and the explanations and reasons being given. It was novel, people took it in and I suppose they took greater notice. So it was a success. Steve Birt of course was the major presenter I was almost his prop man I suppose. Steve, being a teacher, had the up-front ability to coax and educate people which he has never lost.
I didn’t know he was a teacher, I thought he was a Water Board man and surveyor?
KB: Steve wouldn’t know one end of a spanner from the other. He knows chalk and gets it under his fingers, or he used to. As you know he is still involved in the Teachers’ Credit Union. No Steve is a teacher.
Oh yes, sorry, primary school. I am thinking of Bill Howe.
KB: Oh Bill Howe. Bill couldn’t teach anybody anything if he tried.
So you sort of covered the whole of the movement at that time?
KB: Yes we went to a number of Chapters in Sydney, the north side round Parramatta. But unfortunately today there is only the City of Sydney Chapter remaining. That again was part of the change in the industry and movement. In many ways it is a pity that they really have gone.
They were trying to, or actually did form, a Chapter up in the Bathurst-Orange area?
KB: Yes, I think a number were formed in those areas, but I really don’t have much background on them as to when or how successful they were.
AICUM wasn’t started then was it?
KB: No that came in at a much later period of time.
Were you involved with it when it did come?
KB: Yes I have been involved in AICUM since its inception but haven’t played any role in the administrative side of it, mainly because I was more heavily involved with League and Association and Reserve Board and Advisory Committee.
The Reserve Board, how long have you been on the Reserve Board and are you still on it?
KB: No. I was on the Reserve Board for a period 1986 to 1988.
What about the League’s Stabilisation, no the Savings Protection Fund?
KB: Well, that was a forerunner to the Reserve Board. I didn’t play any part on that other than having an involvement like all people did in ensuring that it was accepted.
The K Byrne on the Supervisory Committee of the League in 1974, was that you or was it somebody else?
KB: Yes, that was me. That was another involvement I had there. I worked for a number of years beyond 1974. I think I was on that for a period of at least two or three years and enjoyed it, along with a number of other people. I think the Chairman of our Committee in those years was John Gormley, who I know very well. John was quite a character and he gave a lot of his life and time to our industry.
Were you at Earlwood when you were on the Supervisory Committee of the League?
KB: Yes I was.
Was it one evening a week?
KB: Mainly Saturday mornings we used to do quite a bit of work. There were some evening meetings, but mainly Saturdays.
Who talked you into it?
KB: I think it was Les Robinson who was the General Manager at the time, or one of his people coaxed be I suppose.
Can you remember why, or they just needed the numbers?
KB: I think in those days if you were a Manager and you could add up and you made a bit of sense, then you were the guy for the job.
Can you remember how you went about it on Saturdays there with John Gormley?
KB: A lot of fun. With my accounting background of course, I always felt the thing lacked teeth. We had a guideline to follow which outlined really by the external auditors of the League in those days. Ours was very much a checking system which we all know today is done by computers. Whether it served any great purpose I very much doubt, and doubted at the time. But we had a good time.
What about the other aspect of the Supervisory Committee’s duties which were sometimes denied to them, but other times was recognised, and this is a criticism of how the credit union was run?
KB: Well, I think it was a little bit like we weren’t allowed to venture into the secrets, as I might term it, of what went on and that probably was one of the weaknesses at that stage.
Do you remember an occasion when Dave Palmer was there and an active member of the Supervisory Committee and he actually criticised, had the temerity to criticise, the handling of the running of Board Meetings and Annual General Meetings?
KB: No I don’t know of those circumstances, but I have known, did know Dave Palmer for a long period of time. That kind of action from Dave wouldn’t have surprised me.
You are not the only person to have said that. I think he is proud of it too.
KB: Yes he is one of the old characters of our movement. When you do talk to, or if you have already spoken to Graham Humphries he will have more stories to tell you than any of us would.
I picked it up first in the Quest when Dermot Ryan was objecting?
KB: Yes, well Dermot would fight two flies going up a wall anyway, God rest his soul. But they were some of our characters.
Did you have much to do with Dermot?
KB: Oh yes I have known Dermot for a long period of time. I remember striking him in the City of Sydney one day coming down one of the arcades, this guy with his shirt sleeves around the top of his shoulders and the tie down round his waist and the buttons all undone and sweating profusely in the middle of summer and nearly bowled me over. I had a chat with him and then after ten minutes time, because I had held him up, he was running late for a meeting.
Did you have much to do with him as regards to the League?
KB: In those days Dermot had gone across to AFCUL. But the connection between AFCUL and the League and Earlwood’s long history of course and meeting Dermot, yet had a fair bit to do with him. Probably would have liked more, but then finding out later what he was like, probably no.
Why?
KB: I think he and I might have ended up having a few fights too, because by that stage Dermot’s philosophical tenets were still pretty strong and mine had certainly begun to change. I think we would have had a lot of arguments.
What was different about your idea of credit unions and what he had in mind?
KB: Well I suppose Dermot was an eternal optimist. I think he had an implicit trust in human nature and people. I think that’s fine and I wouldn’t knock him for that. But from my point of view, sitting on the other side of the fence administratively looking at what the industry was doing, the mistakes that it was making and continuing to make and were being made by the League in those days, I felt the philosophy was fine but it was like a jug, you put it up on the shelf and when you needed to apply it you brought it down, but you didn’t let philosophy make commercial decisions for you.
What were the mistakes that you are talking about?
KB: Well, the way the League went about setting up community credit unions in Sydney was a grave error of judgement which I think was proven to be correct later.
Exactly how did they go about it?
KB: Well, there were a number of small community credit unions based in parts of the northern side of Sydney round, I think, North Rocks, Baulkham Hills, Castle Hill and then sweeping around heading to Blacktown. They were living in a fool’s paradise, I believe. Credit unions in those days were still very much oriented towards parish credit unions and probably if you like almost semi-blue collar and hadn’t really expanded beyond that period.
End Tape 1a: 4179 Words: 1 hour 40 minutes.
ANSWCU 29: 11 MAY 1990: INTERVIEWER RICHARD RAXWORTHY: TALKING WITH KEN BYRNE
We were just talking about the community credit unions out in the west.
KB: In the west and north-west of Sydney. I suppose because I had cut my teeth and been one of the few community credit union managers in those days, with as I thought a very good background in the finance world and had spent by that time a fair time at Earlwood, I thought we as a leading credit union had a lot to offer the League in the ventures they were taking. Unfortunately, for whatever reason best known to the Board and leadership of the League in those days they did not seek any form of counsel with Earlwood Credit Union to maybe learn from our experiences. Some of the things they did I was aghast and still am and I think had a lot to do with some of the problems that were created for our industry in later years.
Such as?
KB: Well one of the things they ventured into what is called deficit budgeting, because if you go into a credit union you want to develop it. They took what I think were some commercial aspects in deficit budgeting and applied by people who wouldn’t have known one end of budgeting from the other, let alone knowing accounting standards and acceptable standards and they were dealing with rank amateurs in applying it and consequently the thing was a recipe for disaster from day one. I made those comments known at varying times throughout this period but obviously it fell on deaf ears. But I am sure if they had come to Earlwood and spoken not only to myself but to a few of our other Directors who were pretty commonsense people, they would have applied, possibly, some different approaches and may have saved themselves a lot of heartache that came in later years.
So who were some of the credit unions that ran into trouble over that?
KB: Well basically nearly all of those ones that ventured into that Castle Hill, Baulkham Hills and out in the west area. All eventually failed and were wrapped over by other credit unions by way of amalgamations, etc. It was an unfortunate thing, but the areas they picked to try and develop were of course, as I saw them, into the middle to upper class areas and they were not ready for credit unions in that era. It was the ???????? time to try and do it, today it is more acceptable, but they needed to go into areas similar to Earlwood and try and develop them out of similar backgrounds. That was the viewpoint we held and to this day I think we were right.
Some of the credit unions in that era, particularly the industrial ones, have sort of all got put together. Sunlight went into CIG and then came to Sydney and so on.
KB: You know there were many credit unions running around that had got what you call a community base as well as an industrial base, that had come out of industrial credit unions. I suppose the purists would call them quasi community credit unions. They are trying to apply the philosophies of it, but quite frankly they fall far short of it. Because of their major industrial base the input of their Directors are from the industrial scenes generally I think they are doing more damage than good and I don’t think it helps the reputation of our movement/industry.
But what about your case at Berrima here, you are a mixed industrial and community credit union?
KB: We come out of an industrial base which was then Southern Portland Cement Employees Credit Union, which is quite a mouthful, when I arrived here in 1977. But in the following year, 1978, we set about changing the name of the credit union and going into the community and we now of course have far more community members than pay-roll industrial-style members. By the very changes we made and the action we took we divorced ourselves from that image to become a true community credit union. I think there is no halfway house, you must make your mind up if you want the image you are going to present.
Yes, image, but don’t they sort of complement each other? I mean you’ve got the pay-roll deductions in one area and you’ve got the other people in the other?
KB: They do complement, but I think it is the thinking about how you are going to apply the credit union’s future is the one that will make the difference in the long term.
When you were on the League Board in the first instance, where were you working then? Were you here?
KB: No. I was appointed in 1981 at an Annual General Meeting to the Association Board. It was of course, as you realise, a few years after I joined down here.
Do you know why you were considered to be a country credit union?
KB: Yes. A lot of people thought where we sit here in Berrima, Moss Vale or whatever that we were part of the outer metropolitan area. But they show a lack of geography of course, those people. Because of my background in Sydney I suppose a lot of people saw me as a Sydney person and may of had a viewpoint, because we are fairly close to the metropolitan area, that I was not truly representing country. That view was held by a number of country people in the north-west, who unfortunately I couldn’t get around to see in my seven years on the Board. Running a full-time job as a General Manager and doing that job I still thought I was applying myself in their best interests, even though I was not able to be in their backyards on a regular basis to communicate with them. If they had had a look at the country and as I say knew their geography they would realise, and a lot of them did, that it was an impossibility to give them, if you like, federal-type representation in the set up we had. But I certainly think that in the time I did represent the country well and I think being there seven years, had I not done so I would have been not re-elected. In that seven years I was unopposed at two elections.
You were still at Earlwood before the insurance split happened, weren’t you?
KB: Yes I was there. From memory it was 1971 when the split came. It was the usual cricket ball and bat scene. If you don’t win you take them home. I think those people did have some point. But it was more of a political fight than an administrative one and it was differences between a very small group of people. Many many people in later years said that when those people pass off the scene, and their names are well-known without me having to repeat them, when those people disappeared off the scene all these differences would abate. But unfortunately they didn’t The majority have gone but the differences still remain even though the industry is a lot closer today with CUNA Mutual than they ever were. But really the differences came because of political differences.
Were you involved at all?
KB: Only as one of the people looking on. I was not directly involved in that period of time. I understood the issues well.
Which were?
KB: Well the issues they were looking at, as I understood them, were the return coming back from CUNA Mutual to the Association was not going to be forthcoming and it was all a matter of dollars and cents.
Well what were the issues in the other direction?
KB: Well, I’m not too sure what you mean by the other direction. If you mean the political side of it?
I mean I am talking about that was the view from the ..
KB: That was my view as I saw it. But the real differences in this insurance and League at the time was based on a lot of political infighting and personality clashes. The reason given, and there were certainly some validity as I understood it, was on financial grounds of who got what.
But what about the set up that CUNA Mutual imported from America, whereby they were not only dealing direct with the League, with credit unions through the League, they were also dealing with them direct through the policy holders and the Policy Holders Advisory Committee?
KB: Well, keeping in mind that I was not closely involved in the fighting at League Board level, or whatever, as an outsider and a Manager of a credit union looking on I saw that as being the power play which is still there today. It will always be there in those upper echelon circles. It is no different today except albeit in a little more finesse.
All right. The next thing that happened is Dermot Ryan became Chief Executive Officer of AFCUL. Were you in the formation meetings of AFCUL, were you ever involved in those early days?
KB: No. I was just a rep delegate from our credit union to those meetings, but not involved in the sense of decision making, other than voting on the floor of the meeting.
Were you aware of the structure of how AFCUL was run before Dermot Ryan became the Chief Executive Officer?
KB: Not to any major extent other than a very basic concept. Really no I don’t have the details of that.
Who was actually doing the running of it?
KB: In the days of Dermot Ryan being there?
No, before he was there?
KB: No, I don’t know. It was probably well before my time. Prior to 1968, in those days I hadn’t got to that level of involvement.
Dermot became Chief Executive Officer in 1970. Did you get involved in the Foundation?
KB: Not directly. I suppose I have had an indirect involvement up until early 1989 I had been involved. I was one of the two people who organised a golf day of the year for the Foundation. In that time we raised in excess of $15,000 for the Foundation and as I understand it the Federal Government then funded us, I believe, $3 for every $1 we raised. Unfortunately some of the boys down there, probably wont like me saying this, they showed very scant recognition not by ways of pats on the back, but they showed very little recognition of a lot of work done by other people outside of their formed network of Directors or whatever of the Foundation, by encouraging other States and other people to do similar things. Had they done so I am sure the work of the Foundation, the money raised, would have gone a lot further. I think they see the error of their ways now and they are making amends of trying to be a little more professional in giving encouragement to other people and organisations.
Were you aware of Dermot Ryan’s involvement with the Foundation?
KB: Not to any major extent, no.
You were never a trustee?
KB: No. I think I might have been a little bit too outspoken, as I have already put my views in some of these areas, to be invited.
Your overseas visit to Canada in 1973 with Steve Birt?
KB: Well probably the Earlwood Credit Union was always recognised as a very innovative organisation. It had provided at that stage, back in that period, two Directors to the League which was fairly unique for a community credit union. We had some very active young people in the likes of Steve Birt who certainly has made his mark.
He was at Earlwood?
KB: Yes, Steve was brought into Earlwood as one of three nineteen year old Directors back in 1971/72, which if you think about it was well before its time of encouraging youth. As I said we were an innovative organisation. The first day I ever met Steve he had all the earmarks and qualities, in my point of view, to be a tremendous success within our industry. As one of the people who helped bring him into the industry I take great pride in seeing where he is today. We have been good friends for well on, well nigh, twenty plus years now. Of course we worked together for seven years on the Board, worked together on the Supervisory Committee at the same time, and worked on numerous committees. In the period of 1973 the Board saw the way to the future obviously was community credit unions and determined that we make a study trip to the USA and Canada. We mapped out a program of looking at the community and other types of credit unions and we had a really wonderful trip. We were treated magnificently by the movement over there, because we were only the second group of people to go away on such a study tour, and at our level we were not the shining lights like Benson and company. They probably found us, I suppose, when you consider how advanced they were in those days, a bit of a novelty to them maybe. But we showed them that we had a very good insight into things and we were certainly able to point things out to them. But in the main we learnt a lot and some of the things we brought back to this country were not acceptable at the time, but we certainly saw them introduced in later periods. Some of the difficulties our industry went through here we had an insight into them in the prior period, some of them were beginning to happen in Canada in that time. It certainly was a highlight of my career.
What were some of the insights that you brought back?
KB: A number of the things were in administrative ways of handling different types of accounts, the computer side of things gave us an insight of what was coming with automatic teller machines. Walk-up automatic teller machines were of course very much to the fore over there in Canada and America. They had another very innovative type of drive up ATMs which of course we have now seen come into play in this country in later years, but they were well before their time. Overall it really was gaining the overall impressions and experience which is very hard to relate into minute detail. It is an experience which can only be brought out in later periods when you come across instances when you can call on that experience. I think both of us benefited by that and if I might say so had more of that been done over the years, people like Steve and myself who have played a fairly large part within our industry in New South Wales, we might have seen other people come forward and been able to play the role that we have done, they would have had that encouragement.
1973 that was. In 1977 Queensland Teachers’ tried to start ATMs. Were they influenced by you people do you think?
KB: I don’t think so. Lloyd Hawkins, who I think was involved in that in that period may have spoken to ??????????, and probably did, but I wouldn’t say that we had any influence. I am sure the Queensland Teachers’ had people away in the period between 1973 and 1977 to look at exactly the same thing.
Do you think the League should have picked up on the initiative of Queensland Teachers’ in 1977 faster, or were they not ready?
KB: I don’t think we were ready and I think it could have been a mistake to have done that in New South Wales. In the light of all the things that were happening in that period I think it would have been premature.
So when you came on the Board in 1981, what was the first matter that confronted you people at that time? The re-amalgamations were starting to take place.
KB: Yes it was very much trying to put together the other associations in New South Wales. I found it a very invigorating period to be involved in the change of our industry. Probably in the period 1981 to 1988 has seen some of the most tumultuous times for our industry and I am very happy to have been involved and played my part. The political ability and negotiating skills of Bill Howe of that time had to be seen to be believed. While a lot of people within our industry are not always the backers of individuals, and Bill certainly had his share of critics of which I’m not one, I could say very clearly that his influence is still there today in the results obtained. I am sure we will all look back in history and say it was probably the momentous period in the history of our movement in New South Wales.
When you went on the Reserve Board, were you and Bill involved with the Credit Protection Fund before the Reserve Board?
KB: No. I was not involved with it other than I suppose playing a small role of maybe being called in occasionally to give some assistance, as I was, but I was not involved on the Board itself.
So when you came on the Reserve Board, what year was that?
KB: 1986.
So it was well established by then.
KB: Ah yes. It had been running for quite a period of years. Well established, a very good Administrative Officer and the organisation has always been professionally run.
Did you know anything about, or did you follow the start of the Savings Protection Fund when it was called the Savings Stabilisation Fund and the initial report that was brought back from America?
KB: Yes, I was naturally involved around the industry at the time. It was not a surprise for me, the need for it. Because if you go back to my earlier comments about the community credit union and some of the comments I made in relation to that period of time, it was an inevitable end result of that happening. But not only communities, a lot of the other industrials were in trouble too. Some of it could have been avoided, but hindsight of course for ?????
Do you remember the argument, Dermot Ryan wrote the report I know. Although Ken Miller was involved with it I believe he mainly wrote the other two that were going about at that time. One was about the collection service and I am not sure what the other one was. There were three reports at that time. One was the re-establishment of a collection service. There was a stabilisation fund and the third one was on the central, but that was already established at that time.
KB: Well without having a vivid recollection of it, I think the collection area you are talking about is now Credit Union Collections in the Association of New South Wales. That was formed, from memory, round about that period of time. As to the arguments and the reports, the reports I read yes but the arguments I only had a sketchy outline of it other than that there was obviously a grave necessity to have both a protection fund and the credit union collection side of it put in place because they went hand in glove. One could not of operated without the other at that period of time, they needed each other greatly.
What about the starting of the Central Bank, the initial report and then the setting up of that?
KB: Well probably Les Robinson in my opinion that is the highlight of his achievements, probably will go down in history and certainly was one of the factors that had tremendous influence in one stabilising and two giving the credit union industry/movement the opportunity to go ahead with the financial support that came out of central banking.
But it was Don Harvey who wrote the original report and went to the States to do the original study and brought back the information and went around. Do you remember him coming round to you at Earlwood to sign up?
KB: Yes I do recall that. While I have given Les the kudos for it, I suppose the man at the top will always end up being that person, but yes there were people under Les, Don Harvey and company, who were certainly, if you like, the mechanics of that.
Don Harvey was before.
KB: Yes Don Harvey was before. I realise that. He probably sowed the seed. But the guy that really put it together and made it work and was able to sell it was undoubtedly Les Robinson. The other side apart, somebody had to pull it together and have the ability to pull it together and that was certainly Les Robinson.
How did you get on with Les Robinson?
KB: Very well. I have always had a very high regard for Les and I think he for me, in some regards. Because there is an occasion which we have not recorded here anywhere why I left Earlwood Credit Union. That in itself is, you might say, a highlight and a lowlight for me. I left Earlwood Credit Union back in 1975 or during that period as a result of unfortunately political differences developing within that credit union. Successful as it had been, there was a degree of party politics came into it and the Chairman, Deputy Chairperson at the time were Labor Party members, card carrying members, and though there is no problem in that many of our people are associated with all political parties, but there was an attempt to use the credit union for political reasons. In addition the Chairman of the day and I did not get on well together and our relationship deteriorated to an extent that at one stage in Board Meetings I wasn’t allowed to sit at the Board table, I was sat on a side table and almost treated like a child. I suppose we had two people that really were fairly high profile in their own way. I had my viewpoints, the Chairman had his, the Board had split into two political groups, and I don’t mean party politics, two political factions. There was a lot of infighting. As to why it developed is a mystery to me to this day. Maybe there are faults, and there are faults on all sides including myself, but I made the decision that they were irreconcilable from my point of view and the best thing for me personally and for that credit union was for me to depart the scene. I went and spoke to Les Robinson who was a very good counsel for me in those days, along with Steve Birt who at that stage had been, and he probably will not like me saying this but the reality is he was probably deposed as Chairman of Earlwood Credit Union, seen to be too close to me. This particular fellow, who was a barrister and a Crown Prosecutor, was brought in as Chairman and I could not get on with the gentleman. I took counsel of Les Robinson and he said to me that when the time was right for me to leave he would find me a credit union to go to until I could relocate myself. That is where I had some involvement with the Credit Union Savings Protection Fund because I went in for a period of four months to manage it. The credit union was defunct and ready to be shipped out into another one. So that is where I had a direct involvement with them.
Which credit union was that?
KB: That was STC, Standard Telephones and Cables at Alexandria. When I got there, there were five employees the oldest employee had been there two weeks. So it was a rather difficult scene, a lengthy story and I could tell you some really good stories about people who worked for the League in those days who were my immediate bosses, but I don’t think this is the time or place to go into those.
Well if it isn’t now, it never will be.
KB: Well I will go on record. There was a lady, Pat Taylor, who manages Premier Credit Union and she was my immediate boss. There was a fellow called Geoff Cambridge who was involved in those days with the Savings Protection Fund. I was sent out there to manage this little show. The thing was a mess and I wasn’t Superman. I approached Pat Taylor and said, ‘Look, I need a very competent bookkeeper and an EDP reconciliation clerk and I will do the rest. But,’ I said, ‘it’s not a one man show.’ I couldn’t get their backing. I went over their heads to Les Robinson, which is not the thing to go but I am not the kind of person to sit idly by. He weighed it up, obviously. I got what I wanted and from that day on with Pat Taylor and Geoff Cambridge my name was mud. But that credit union got shipped into Communications, as part of it. I think in the period of three or four months that we were there with this team of three, we certainly didn’t change all the problems but we certainly got into a much better shape to transfer it over. But if I hadn’t taken that action it would not have happened. And yet those people , Pat at that time had high profile, she talks to me but I’m sure she remembers those days.
End Tape 1b: 4317 Words: 1 hour 45 minutes.
ANSWCU 30: 11 MAY 1990: INTERVIEWER RICHARD RAXWORTHY: TALKING WITH KEN BYRNE
You have got something to add?
KB: Yes, I was saying when I left Earlwood in the eyes of a lot of people I left under somewhat of a cloud. I knew in my own mind that the steps that I had taken were correct for me and the end result for the credit union. I had grave doubts about its future: one because the management that the Board then put in place, the person who is no longer in the industry was working for me but had already been promoted beyond the level of his competence and that person was put in charge of the credit union. Now once that happened I had no doubts the course it would take and one of my moves after leaving Earlwood when I went to see Les Robinson, the second move was to go and then see the Registrar of Credit Unions whose name unfortunately is escaping me right at the moment, it shouldn’t because I knew the guy particularly well. It was David*I will come back to it, the name will probably come to me. But I went to see the Registrar and tell him from my point of view why I left and what I thought was going to happen. Now he was not really able to make any comment at the time, being a Government appointee, but he certainly didn’t show any disagreement on the comments I was making other than to say Registrars can only take action when they have concrete proof in front of them. My comments to him were, ‘Well, if you wait you will see the concrete and don’t let it set.’ To cut the story short, I did a lot of other things in between and then eventually in 1977, I think it was, or 1978, after I had come down here, I received a phone call one day from one of the officers of the Registry telling me that the Reserve Board had sacked the Board of Earlwood Credit Union, they had moved in on them and that the Registrar thought that might have been of interest to me, that was the exact words used. I found it interesting, I suppose from a human point of view I thought it was justification of my actions because I knew the course the Board was going to take, and the decisions I disagreed with at the time were inevitable. The management was incompetent and unfortunately the Board was sacked, the Manager lasted for a short time after that and that credit union from that day to its amalgamation into St George’s River went backwards. I hope the people at George’s River don’t take umbrage to my comments, but even under their jurisdiction as a combined credit union it hasn’t gone anywhere either. Unfortunately lost from our industry was a name, the credit union to the time of its demise was the oldest original credit union in existence and that’s a great pity. I am still a member in financial terms and in spirit, but unfortunately it is lost and if I had my time over maybe I would have done a few things differently and it may be still there today, maybe I would still be there. But that is history.
So when did you come to Berrima?
KB: In September 1977. That is a long story. The Board had approached me two years earlier in Sydney, back in 1975. The Manager was wishing to retire and they knew of my background in community credit unions and they were looking to take the credit union somewhere, they thought it had potential. They invited me down for a chat, which I did. One look at the financial situation showed me that they were going out backwards. They knew it but they had no way of turning it around. I weighed it up. I made intensive inquiries with the Board of Decentralisation at the time within the Government. I new the F5 freeway was coming through. There were plans for a lot of industry to come here. I had known the area myself since very early school days having spent a lot of holidays here, loved the area and I thought if I was going to work there and live there, what better could you have? So I suppose in making a commercial decision in going to manage a credit union I made one on grounds of heart rather than financial, because I could see the trouble they were venturing into, but anyway I took the job on. We turned it around from 1977 when it had about $600,000 in assets to today when we are at just under $27 million. We now have a branch operation with four branches and I think we have been successful and the objective the Board set me to do for them, I think I have achieved and my years down here have probably been the most enjoyable of all the periods even allowing for the great part of my heart spent in Earlwood. I think for myself and my family the move from Sydney was timely. It gave me the chance to refire my enthusiasm because I can assure you in 1975 I was very close to going right out of the industry, totally disillusioned, but I’m glad I didn’t.
When you came here to Berrima, was it strictly an industrial credit union?
KB: Yes it was a very small credit union called Portland Cement Employees Credit Union, which today is still a major company, Blue Circle Summer Cement. But the Board had vision and they were a Board not dissimilar to the early Earlwood Board and that it what attracted me to them. They had a vision of wanting to do something. I am a person who likes to be an achiever and I saw that we could work together. The present Chairman, Jim Galloway, was there when I joined and is here today and he has been very instrumental in working with me and me with him and I place him very high, hold him in high regard, as a Chairman of a credit union. He would hold his own in the vast majority wherever he might go. Not that he is going to, but he is a very level commonsense person without having a brilliant academic background. Commonsense outweighs a lot in all the people I have worked with in this industry.
Now, did you transfer engagements or take anybody over in getting to the position where you are with the branch in Goulburn?
KB: Yes we took over a small credit union in Goulburn, the Workers’ Club Credit Union, but that really was not an influencing factor in us going to Goulburn. We actually set a branch up there many years before we took this little credit union over. We took it over really to stop any bad publicity happening in Goulburn because the credit union was in financial difficulty. But it was only a couple of hundred thousand dollars in assets. Then we eventually took over another small credit union in Yass for very similar reasons and that was one of the Antigonish credit unions, going back to a long period of time. But we rescued it before the name started to go off in the town and we did it for that reason alone.
What did Father Gallagher have to say about that?
KB: I never spoke to him about it but many of the people involved in that credit union were totally disillusioned of course with the Antigonish approach. Were so disillusioned that they didn’t even have the drive to take it any further and it was really defunct when we took it over.
Have you ever talked about credit unions with Father Gallagher or Miss Rose Gallagher?
KB: I spoke only on one occasion with Father Gallagher and that was at a function, that was just in idle chit chat. Rose Gallagher, yes I spoke to her as a result of having to get information on the old Yass Credit Union and I’m afraid she was not very helpful, quite evasive. That I think was indicative of a lot of the problems the Antigonish Movement had. They really didn’t know what they were doing, let alone know what was going on.
Well, they are still going out there. Miss Gallagher is Secretary of a whole lot of little co-operatives.
KB: Yes. But I think little is the operative word.
Yes, they’re small, but I think they are proud of being small.
KB: I didn’t mean it in a derogatory fashion. I just think that they are not really achieving anything, haven’t achieved anything over all the years. But maybe they see that in their small way they are doing something successful. If they are and the people are appreciative of it, fine.
What about Father Gallagher, not only Father Gallagher but the Antigonish idea that the starting of credit unions and involvement with credit unions as an educational thing?
KB: I think I can totally agree with the concept and the ideas of the Antigonish Movement. There was nothing basically wrong with them but they probably needed a different group of people to really make it work. In addition I think at the time when they were trying to make it work, co-operatives generally within New South Wales were a dismal failure. It is only in the latter period of years that especially the current State Government are trying to raise the idea that co-operatives have a place. But in this day and age when you look at the average person, I still have some doubts as to whether the concepts can be made to work wider than they appear to be at the moment in a lot of the butter factories and fishing co-operatives, canning and that type of thing. If the idea can ever take on and be given the support by Governments and a way found to finance them, I’d have not doubt that in the present time they could be made to work. I think people are ready for them, but I can’t see the vehicle that is there yet that is going to take it and take it quickly.
The only way I see that it could be taken there, and taken there quickly, is if the credit union movement took it up in say a housing co-operative.
KB: Yes, I think there is certainly an avenue in that area, but again it’s a matter of funding. I believe it could work provided the State Government and maybe Federal Government really made a conscious effort to fund. They can find money for everything else if they can find the money I have no doubt it can work.
I’ve looked into it a bit, because I’m interested from my own point of view. Having got divorced later on in life and ending up with very little again, and two into one won’t go etc., consequently I am one of the people that find they have got a bit of equity but not much, not enough to do anything with. There are lots of other people in that boat. But what the Federal Government has done, in order to use some of their funds, you have to take with you a number of other people who are considered disadvantaged and are on that list. The two sides, the one with equity and the one without and the Government putting some money in for them, have got to form a co-operative between them, that doesn’t always work.
KB: No. Of course you come back, and you always will, to a degree of equity and who controls the money and who puts it in. Because let’s face it the wheels run on who has got the dollars. There is no difference if you are in a co-operative or not. But one area that everyone would have to keep in mind, if credit unions are involved, is the Reserve Board. They are a commercial organisation in judgement, not a philosophical organisation, and if you don’t make a profit in any one period you will get a knock on the door. So I can imagine Boards in credit unions and General Managers in credit unions would be taking a long hard look if they had any brains before they got involved because who wants the knock on the door.
True enough. Did you see anything of housing co-operatives in America and in Canada, where they have been very extensively pushed forward?
KB: No, in the time that Steve and I were over there in 1973, because of the size of the credit union industry in that period we were looking really at the basic operation and I suppose the consumer side of it, not looking at co-operatives at that point.
There are some very big ones, not only big ones but also some very successful ones in New York at the present moment. A whole area which is devoted to them.
KB: Yes. No doubt, I have made comments on this, it can be worked, but I just rest on the comments I made earlier.
But I have a feeling there will be more and more people if the economic climate does not improve and I have a feeling it is not going to improve quickly. There will be more and more people with a little bit of equity and they will just blow it and be no further forward unless somebody latches on to that capital and says, ‘Here we can help you do something constructive with it!’ That’s what I’m saying. So I am saying there is a market there if you use it, if the credit union movement uses its brains and is careful about what they do and sees they build on a sound footing, I think there is a market there.
KB: I quite agree, but they don’t have to be called co-operatives. I think the credit union name and what is, if it is developed properly, can achieve all of that within its own ranks. But they have got to apply their thoughts to it now and get on with it. That is going to be the test of their resolve and will in the short term.
The big problem also in any of these areas is you need people with expertise. Now in the credit union movement you have got a lot of people with financial expertise but there is not as much out there in the community and there certainly isn’t in the rest of the co-operative movement to my knowledge.
KB: Yes. Well if you have a look at the lack of success of co-operatives it has usually been that they failed on financial grounds.
People don’t know what they are doing.
KB: Exactly. They form them with great ideas and great resolve and great will, but the hard-nosed commonsense commercial decision making has to be made and tempered with the philosophical tenets, not a lot different to our credit union industry’s early days.
But there are plenty of people like me around, people who have the philosophical ideas, they’ve got the ideas, they’ve got the will to do it but no financial backing.
KB: Yes they have got their idiosyncrasies, but if they can get them together, and you need the amalgam of both, then yes it can work.
Yes you need that. Right we have carried on on that for a long time, a bit too long I feel. Now computerisation were you involved in that at all at the League level or the credit union level?
KB: Certainly in our own credit union field I have been heavily involved. On the Association side only in the period of the Director making a decision to spend x thousand of dollars to buy new computers.
Were you involved in the early days when there was a batch system?
KB: Oh yes. That goes back to my early days and the batch system. I don’t want to remember it.
Sydney Credit Union claimed that they were the first financial institution to introduce computerisation in any form in Australia.
KB: Well knowing Morrie and Jack and company, they usually claim they created the world. But they could well be right. I have no doubt that they probably were one of the early ones. I will rest with them, they are persuasive people.
Les says they went down to IBM and had a program written, mind you it was batch. Because they weren’t the first one with their own that’s for sure. The Schools, have you run any Schools?
KB: Well we do some in the credit union, Schools and training. I attended many, many Schools with the old League and Association, but not running myself personally. I leave that to the chalky side of things.
You weren’t early enough for the Newport Schools, or were you?
KB: I attended one and it was probably one of the latter ones. That was an eye-opener in how to drink not what to learn.
Room 19?
KB: I don’t remember the room number. I might have seen it going in, but I wouldn’t remember it coming out.
??????? said that the after hours talk is just as important, even far more important, than the during.
KB: Far more important. That hasn’t changed even to this day.
Now we have covered mergers and your new branches, we haven’t covered your new branches have we, Bowral?
KB: Well the origins of the credit union of course were in Moss Vale and the first branch was into Bowral, the second branch into Goulburn and then we opened an agency branch in Mittagong which is now being converted into a full branch office. That is about the extent of where our ambitions will go to.
Is there any competition left in the area at all in credit unions?
KB: Well, all credit unions are in competition with each other today because of the Statewide Bonds. But direct competition: we have two credit unions on our borders, Macarthur and Illawarra, but we have excellent relations with both at Board and management level. We exist in good harmony.
Have you been involved at all, right up to date at the present moment, with the restructuring of the future directions?
KB: I came off the Association Board in 1988 knowing full well what was coming. It was timely for me to go for family reasons and my own credit union here. But I could see the dramatic change coming and I knew that I was not going to be able to devote the time to it. That was one of a number of reasons I decided not to re-stand in 1988. Yes I have had an involvement, but only at the credit union level.
You will have noticed the past struggles that have gone on between the different States as far as AFCUL and so. Were you involved?
KB: Yes well from my early days the power struggles have always been there. It has never been any different. The record has been different, the players have been different, but the end result has never been any different. That is that New South Wales has always been the larger and more successful State. The others have obviously been jealous of us. They have always thought we wanted to rule the world. Consequently anything mooted by New South Wales has had cold water poured on it. Even Project Reversal, as I called it, to begin with, or Project Renewal as it is properly known. You look at the current situation today and those in favour and those against, what’s new.
Why do you call it Project Reversal?
KB: A little catch-cry of mine which Reg Elliot didn’t take too kindly to, but it certainly took off with a lot of people in the industry. I just thought they were going to take us down the wrong track, and I still have some grave doubts. I can see it becoming Call Reg Bank. I think we will all end up as branch offices of one central organisation in the foreseeable future. I have no doubt that will be the end of credit unions as we know it, but maybe that is an inevitable end result of where the economy is going today. But I have doubts that a central operation is going to work when you look at the tenets of how the credit union is operated today.
That is a big mouthful. I mean the Central is working in New South Wales. Do you think that is working well?
KB: The Association of New South Wales has generally always worked well because it has been professionally managed, professionally run by Directors and that is no prod for myself as having been there for seven years. But the history in all the other States doesn’t bear comparison with New South Wales and we can only stand on our record.
So you think that any central body will not be as well run?
KB: I am not saying it will not be run administratively well, but too far removed from reality. They are telling us we have a Board of twelve and then we have got 40,000 horsemen, sorry forty people who will make up this group to advise the Board. It is hard enough to get nine people together on a credit union Board, how are you going to get forty together across all the States successfully at any given time. The Board of this new body will be far removed. They may well be professional people who can make brilliant decisions, but the forty people on this other group I cannot see that they are going to maintain contact and I think it is removing the control completely and the reality of it and I think there will be more and more disillusioned people. It is hard enough to get good Directors now, it will be harder in the future and without Directors to control management that will cause a bit of a stir around the boondocks. I think it will remove things from reality and that I think puts the credit union industry as we know it today in jeopardy.
What you’re saying is that it wont work.
KB: It will work, but not as we know it and it can only work as an end result, as I said, with fewer and fewer credit unions. Inevitably that will then end in amalgamations of those remaining and you will end up with, as I said, one central body and the rest of them all branches.
That is pretty pessimistic, do you not see anything encouraging?
KB: No I don’t. Unfortunately I don’t.
Well, I don’t know what to say after that. Perhaps I’d better go back to ticking off the various things that we’ve got to talk about. I have asked you very briefly what was the first thing when you were a Board member and you told us of the re-amalgamations of the various State associations.
KB: That was a necessity within the State. But I don’t think a parallel can be drawn between that and where we are today. They were political differences. You needed to draw the thing together under a State body before talking to governments within the State. But that was one period of history, this is another period of history and they don’t bear comparison.
People have said that you can’t go back, I know that, but you have got to look to your roots again in the credit union movement in that case?
KB: Well it has always been people wanting to reaffirm that approach, but I think the reality of what I said in that we may have one central organisation and a whole lot of branches, maybe that is the way we have to go. If you look at the individual credit unions today in their size, compared with banks, they are attempting to provide the range of services that the monolithic giants are providing. The economies of scale to do that are not there and if you can’t provide the services to the average Jo Blow today he is not interested in philosophy, he is interested in getting service. If you can’t provide it he will go somewhere else. So maybe what I have said in my mind is inevitable.
Yes. But I go to a bank because it is close and it is convenient.
KB: That is one of the points I am making, that people wont cross the street, travel to another suburb because they want to deal with a credit union. A few will, but the vast majority of people today, and particularly the young ones, they have a different outlook on life and theirs is built on convenience, speed, whatever. They have very few philosophical grounds and it is very difficult to get the message through to them: one, they don’t want to hear; and secondly, how do you get to them. I’ve tried.
But there is one aspect. I mean I go into my bank and there is a big queue. Now I have never seen a big queue in a credit union.
KB: They do exist.
Now you are trying to disillusion me. I don’t like this business of queuing. You can queue in a Post Office now and I don’t like that at all.
KB: Well credit unions work very hard to avoid queues by making sure that their staff are reactive from behind the counter, whereas in a bank you can have ten sitting behind a desk and one at the counter, we work the other way. But those people behind desks are not normally cashiers. In peak times we work hard to ensure that we don’t have queues. But it gets harder and the more bodies you’ve got the more costly it is to run the organisation.
Do you still do any service calls?
KB: Yes. I will still go to members’ homes where there is a need for me to be called out. In fact today, this afternoon at five-thirty, I am going to a member’s home to assist him with some matters because he doesn’t keep the best of health. That is still part of our scene.
Well you must be one of the few, because I notice Sydney still does it. Mind you they don’t do it as much as that, I don’t think.
KB: Well none of us do to the extent that we used to, but I still have that tenet within me. Some of my other staff certainly do and I encourage it. It doesn’t happen every day but where there is the call, it will be met.
Something that Sydney do, which I thought was rather good. When they took over an area they always included the staff and they usually used the same staff on the service calls, particularly, or on the branch if there was a branch or whatever. In that way they managed to keep the continuity going.
KB: Well that is not any different to what we do in the country. At our Goulburn Branch we only employ local staff. We employ locally, we attempt not to bring them from outside even to the management level. That is part of being within the community.
Do you have a Branch Manager at each branch?
KB: Yes, we do.
Now apart from the main re-amalgamation when you were on the Board, what was the next thing? I suppose it was the consolidation of the ATMs and such like? Did you have any part in the decision-making there?
KB: Yes, well they were all periods of time in which I was involved. Whether it was FCS or AFS, all those companies involved in computers and automatic teller machines. They have always been controversial areas and like our industry always has been no-one always agrees.
Did you have any differences with any other Board members over the way that they were to be set up?
KB: Not really. I accept that was the way technology had to go and I had no difficulties with it as a concept. I certainly had difficulties with the management and control at different times.
Tape 2a: 4744 Words: 1 hour 45 minutes.
ANSWCU 30: 11 MAY 1990: INTERVIEWER RICHARD RAXWORTHY: TALKING WITH KEN BYRNE
We were talking about computers and ATMs. But you had said what you wanted to say I think.
KB: Well technology that is the future and I don’t have a problem with it. The paying for it I do, but as a concept to be used it is here and it is not going to go away.
Even I’ve started using it and I never thought I would.
KB: Well we might all like to say we don’t want it, but if we are going to compete and exist as an movement/industry we have to embrace it and embrace it in its widest formats. But of course what we haven’t done and we’ve got to do is the inter-connecting between credit unions within the State and interstate. This hasn’t happened and if it doesn’t happen we might as well kiss it all goodbye.
I didn’t realise it hasn’t happened.
KB: Well, you’ve got Redditellers which people can go to when they can find one and they can go to some of the other things, but really the concept that if people see a credit union office interstate or up country or whatever they should be able to expect to walk in and deal with that credit union. Until that happens we are only kidding ourselves.
Won’t this happen with the new arrangement we are thinking of?
KB: Well to harp back to what I said about a central body and all branches, that may happen. Maybe that is what has got to happen to provide the service that people really want.
Why hasn’t this happened? Ausnet was developed.
KB: Yes, but that is the hardware mechanism, I am talking about people being able to walk in with a passbook as you can in the Commonwealth Bank. It doesn’t matter where you are in Australia you can walk in and get service. We can’t because of the autonomous nature of credit unions and they try and preserve their own little backyard. It comes under two words, lack of co-operation. Until we get that total co-operation and the will to make it work we’re not going anywhere. We are an industry/movement based on co-operative tenets but basically we are the most unco-operative industry you will find.
But surely what they are actually proposing at the present moment is going to make them more co-operative?
KB: I would like to think it, but you tell me how a central organisation can dictate to autonomous bodies?
Of course they can’t because it is voluntary.
KB: That is exactly my point. You can have the nicest vehicle at the top, with the swankiest office and all the nice trappings, but it doesn’t mean to say that the arms are going to work any better.
So it is very important that they actually satisfy the needs of the credit unions as well.
KB: Well I haven’t seen that anywhere in Project Renewal or how it can be done.
Well they are going to have to find out or it wont work.
KB: Well we have made our points known to them on that area and no-one has been able to satisfy me yet that Project Renewal, while it is needed to streamline the administrative part of central operations; I have no arguments with it; but all the points being made that the industry will be better off as an end result in its widest concept I’ve yet to be convinced.
Yes, well we are going back over stuff we have already done. What was the next thing during your period of time that you remember that went through the Board that you can tell us something about?
KB: Well I think the co-operative marketing, which was really one of the very contentious issues in that period because it became a mandatory thing. Credit union people don’t like being dictated to and told what they will do when you think of their autonomous nature. It came to be a mandatory thing but it was a difficult period of time and is still a concept not accepted by all. But it certainly, I think, helped get the image in New South Wales across fairly broadly and is probably no doubt helped to create a lot of credit unions. But even those who have embraced it have only paid it lip-service in many ways and many of our very large credit unions haven’t adopted the logo which we are familiar with. If they all did, they would be helping promote the credit union more widely. But you’ve still got your apples around and all the different things. Fine, but that is coming back to this close-knit autonomous nature of credit unions. They still haven’t embraced the wider concept that they are a credit union and that they ought to have common signage. That is my viewpoint. I’ve probably upset one of our largest credit unions in saying that, and many others. But let them put their mouth right where it is. Vote but put your signage up. It is a very well-known sign, logo, why not use it.
Some people do but they use other things as well.
KB: Yes, but some don’t use it and put their own up and I think that is foolish.
Yes I suppose so. So what else?
KB: Well there are a lot of experiences, but I think we have probably covered the main things in that period that I was on the Board. Really there were many we covered. We have covered the ATMs and computers. We’ve really covered most things.
What about Edvest and Bridges?
KB: They were minor issues. There are many, many minor issues. Edvest has been fairly successful. It is part of the history of what we are recording. We have said it by name and from my point of view it doesn’t need much more.
There was some controversy elsewhere about investment advisory services, for instance there was Edvest and Bridges and a number of others.
KB: Well Edvest was a retirement service, and embracing as part of the service is investment advice. Investment advice, as we all know out in the wide world, is a contentious issue fraught with difficulties. But it is a service members want and we do provide it. But it is one you need to be careful of in the style and kind of organisation you embrace. You’ve got your used car salesman, your real estate salesman, anywhere where a quick quid is to be made you need to be careful. Investment advisory services have already demonstrated it has its quick quid merchants in there.
What about the software that is marketed by FPS and the Norwich scheme, the Norwich Insurance Company scheme?
KB: This again is in this retirement area. Yes, I am familiar with nearly all of them. What we have on the FPS side still has its basic parts to it. But I think we have a long way to go in that software area. I couldn’t make too much more comment on that.
I have come across it at various places but I haven’t had a chance to try it.
KB: Well, maybe one day.
No, I don’t think so, not me. I don’t intend to retire anyway. What about the matter of insurance services? I notice you have one here. Were you involved at all at the Association level on that?
KB: Yes, I think we were probably the second or third credit union into CIC in its early days. We’ve make it certainly work here and we’ve taken it in more recent times a step further than that, taking on a slightly different concept to CIC to make it work more effectively for us. It is in its infancy but we have a more direct input, direct control and can control more the end result for our members. In other words we are having a greater say in how our insurance products are put together and we have only been at this since March this year. We have already written in two months what we would have written in two years with our change. So we are very happy with the changes we have made. But it is built on, based on what has come out of CIC and we are all thankful for their association in making it all happen here.
Is that the same CIC that Clarrie Murphy left?
KB: Yes. It was formerly known as the National Co-operative Insurance Company based in Newcastle. I dealt with them when I was at Earlwood because I knew Clarrie was with them in those days. That is where it has ended up today. It is a different vehicle from what it was. Now it is all wrapped up with a public company so you can forget the co-operative bit.
Well, I think that happened during Clarrie’s time there.
KB: Well, it was heading that way.
He mentioned that to me. But he left the League and then went straight over there selling it, I think.
KB: Yes, Clarrie has moved around a fair bit in and out of our industry over a fairly lengthy period of time.
I have recorded him in a number of places, because when I was doing the Rail staff, for instance, he was Development Officer there.
KB: And he popped up in Earlwood too.
But he was there in the early days. He told me about the cottage discussions. Do you know something about those?
KB: Yes, I can remember holding cottage discussions. I think they had a tremendous point in helping to spread the word because the industry has probably always operated on word of mouth as being its most successful way. It is a pity it can’t be done today, they were highly successful. But time consuming and today I think you would have difficulty in finding one the people home and two turning off the goggle box.
Can’t you do it over the television, a two-way cottage discussion?
KB: Be beaut if you could, but I think Country Practice and E Street or whatever the garbage is would overrule it.
Put John Laws in charge.
KB: Exactly.
Well there are a number of other services, for instance we have mentioned the central banking, but the supply services for credit unions, do you think that they have been successful?
KB: Its played its part, but in my time on the Board it of course it got the razor treatment. I can recall the end of one financial year we ended up, after the stock take, hordes and hordes of bits and pieces that nobody knew about and consequently the accountant, I think Dennis Rutherford at the time was involved, the end result was the Board was to reshape, in conjunction with management of course, reshape the whole idea of the supply department to make it more efficient. The end result of course a lot of items and lines were discontinued and today it is a shadow of what it ever was. Here is one credit union of our size making very little use of it because they just can’t supply the needs. That was an inevitable result in any case. So I think our action in pruning it at the time was again a wise decision made by the Association Board.
Now is there anything connected with the Association or with the credit union, if you like, but with the Association in particular that we should have discussed but we haven’t?
KB: Well there was an interesting concept that you may not have come across where a former General Manager, John Harper, left us in unfortunate circumstances. I think the way it was done from a Board point of view and a credit union point of view was very poorly handled. When you have a palace revolution from within bringing about the demise of a General Manager, I find that difficult to run with. The way it was handled by the Board at the time, and I was a party to it, is not a highlight of my career. I think it was badly handled by the Board at the time. I think I knew in my own mind that it was wrong but for whatever reason I didn’t take the courage of my own convictions and stand aside and fight it. I know I should have. In saying that I’m not saying the end result of John Harper going would have been different, but the way it was done left a very sour taste in my mouth.
Exactly what do you mean, how was it done?
KB: Well, from my understanding there were five managers, senior managers of the Association, who by their own devices working through, as I understand it, one of the Association Board members, was the catalyst to bring about his demise. That to me is not the way to go. Unfortunately, as I say, I should have from my point of view stepped aside from the whole thing and taken a different course of action. Again hindsight is beautiful. But it isn’t in my opinion one of the highlights of the history of our Association.
What was the actual difference of opinion, was it?
KB: The reason given, in inverted commas, was ‘Management style’. I prefer not to make more comments because it is probably something that I feel if I start to make comments and mention names, it is probably not the thing to do. It is probably better left. The comments I’ve made, whilst they leave a lot of things unsaid, I think enough people out there can draw their own conclusions.
Fair enough. But were there any substantive issues?
KB: Not as I saw them, unless there are issues that were not brought to my attention as a Director, and that is possible. I am yet to have shown to me some really good reasons, even though I do believe a lot of senior managers supposedly or our larger credit unions are not happy with his management style and end result. I still wonder as to what they were all about. The things have never really surfaced and I wonder why. It could well be of course that when you have a parting of ways of a General Manager and there are decisions made as to what the persons rights and entitlements are, there are certain things that have to remain incommunicado. I am very much aware of a number of them, being one of those Directors, so I can’t really afford to make any further comment.
Fair enough. Yes that is one area that we didn’t discuss and incidentally I am glad that you have sort of filled me in to some extent. I realise that there is nothing terribly much to be said. Unless I can find John Harper and ask his side of things.
KB: That would be interesting. I am quite sure that you may also elicit some comment from the present Board of Directors, the majority of whom were also involved. That would be interesting.
Yes I didn’t ask Bruce Robertson yesterday, I must admit. It is a question that did occur to me and I am glad you raised it.
KB: I myself had no difficulties with John Harper, I got on well with him. I think he did a lot of good for our Association. I didn’t always agree with him, but there again I’ve never always agreed with General Managers in the past that I have worked with. It was a difficult time.
Well, if we have got nothing further that I have left out, then I will go through the final check of the questions of you personally and your involvement with the movement and your opinion.
KB: Sure, fine.
Do you think that the credit union movement has taken a toll on your family life. Any regrets in that area?
KB: Well, I have no regrets, but my wife would probably come in differently. As I said, when I came off the Board in 1988 my family had grown up and left the nest, as they say, and I have an interesting little comment that might of benefit for other people in the future. I came home one night, I think the year was early 1987, and I had attended a Board Meeting in Sydney on the Monday night, the Tuesday I had a meeting so I stayed over in Sydney on the Tuesday night. The Wednesday I had Reserve Board Meeting and I came home on Wednesday night. I came into the house and women being of that eloquent nature when they wish to be, the comment made to me was, ‘It’s marvellous to come home at night at talk to the two dogs.’ Now that message sank in as it was meant to sink in that it was time for me to step aside. I made that decision in 1988, much to the disappointment of I think Steve Burt and maybe a few others. But there is a time and a place to leave behind a lot of extra activities and I have no regrets in making the decision. Yes to answer your question, while I don’t regret it others in the family may. Certainly anyone who is involved outside of the management of a credit union, or a Director of a credit union and take a wider role as I certainly have done, yes there is a price to pay. I don’t think that is recognised by people in the industry and in saying that I don’t mean laurels, pats on the back or whatever, but I think a better understanding would be something that people ought to take note of.
It is not only the volunteers, it is also the Managers who have to do extra time.
KB: Well, Managers have always been looked on generally as the poor orphans. From my point of view, I would suggest that it those General Managers, Managers who have an involvement in the industry have given far more than the average volunteer Director of a credit union. I make no apologies in saying that. We are all volunteers while some of them like to call us professionals and look down on us.
I have that problem myself. Who do you think are the outstanding people you met in the credit union movement over the years?
KB: The biggest character was Dermot Ryan. One of the most influential people because you had difficulty getting a word in, and Bill wont mind me saying this, Bill Howe. He had an influence on me over a long period of time and I have a high regard for Bill. Bill my comments are in jest, you will understand that. Steve Birt because I worked so closely with him and having introduced him to the industry he has had an effect on me as I have had on him. Les Robinson in a smaller way, but a significant way as I have expressed earlier. In the more latter periods of time, Jim Galloway, my Chairman here. They would be the people I think, I have left out others, but the most influential ones would be those people I have nominated.
So what do you think that the principles of the credit union movement are?
KB: That is a loaded and a difficult question. The principles? I might ask the question in turn of you, what do you mean by what are the principles?
Well, what is the philosophy behind it as compared to what it was, compared to what it is?
KB: Now we are on the right path. What I saw as the philosophy in the early days was helping people and we certainly did and spent endless amount of time, which I happily did. I felt we were achieving things because those people wanted to be helped. Today I see it differently, that where you often go and try and help somebody you will be accused of interference and that is the most significant thing, that people don’t seem to want the help in the same way. They certainly need it and need it more, but the whole concept has changed. It is more people want a service at a price. If you can provide it good, if you can’t well ta ta. Loyalty in a credit union today is a thing of the past generally. Philosophy is generally gone and philosophy can still be used, but as I said earlier don’t let it cloud commercial decisions. We operated under the word ‘credit union’ today and I will say it, it is a far cry from what it was, it will never go back and unfortunately I think we are really just another financial institution operating under a two word scheme. I make no apologies for it. It is difficult to apply that philosophy and make the differences today.
So the other two questions I had you have partially answered. Has it gone wrong in any way would you how could it improve?
KB: Well I will make some more comments I suppose. The difficulty is that we live in a different world of consumers. The self-help type of thing people don’t appear to necessarily want, or they wont admit that they want it. The ability to take the credit union message out there has never been easy. It is certainly harder today. It is not a matter of spending dollars on radio and media and TV, that is only influencing a commercial decision. The real worth of what a credit union is and what it can do is the most difficult thing to take to people. I don’t know how you can do it. Cottage meetings were a way, but how do you get a group of people together when you only get fifty at an Annual Meeting. I don’t have the answer. If someone has, I would be delighted to see it. But I just think we are fighting a losing battle to get across the real idea of what credit unions were about. People don’t read things. You send newsletters. You know the reader level is low. Word of mouth, getting them together, but how do you do it. We’ve tried it. Even in latter days we have tried to get groups of people to come along for us to tell them what it is all about. Unfortunately it isn’t working.
Do you think changes need to be made in different areas? For instance take the legislative area, at the present moment the rules and regulations of the game, do you think they need changing?
KB: You can legislate all you like, but you can’t legislate to stop a person committing a crime or killing themselves or doing certain things. Legislation is there to protect governments from criticism. That will not alter the way people do things, in my opinion. It is a different side of things, legislation and rules. They are needed to be protect consumers, because we live in a consumer-oriented society. But getting back to what makes credit unions work, why people would join and the things we would like to achieve will not come by way of legislation. Never can.
It’s filling a need surely?
KB: A perceived need, yes. But it is a perceived need at a price.
Well, that is always the case.
KB: True. But in the early days of credit unions you have the three bore merchants, the banks who only wanted to deal with giving you an umbrella on a wet day, credit unions had it to themselves. They didn’t realise it fully because had they done so they might have made the inroads that were made in Canada and America, particularly Canada. I think we missed the boat to an extent but maybe we were working as hard as we could to achieve what we did.
But both Canada and America have had an awful lot of trouble with their commercial loans lately.
KB: Sure. They lost their way and were beginning to lose their way when I was there in 1973, as I think I alluded to. They were getting very big. In fact Van City Credit Union, Vancouver, with six hundred odd million Canadian dollars in 1973, they were well into those commercial areas. They saw it as the way to go. But big is not always beautiful.
What about the various things that people put forward? I know that several people put this forward, the idea of reversing the trend on loans, smaller loans, smaller rate of interest and the larger loans the larger rate of interest, standing things on their heads.
KB: Well, from my point of view if you go out and try that now you will go broke. The larger loans today are attracting in the banks and elsewhere the lower rates of interest. The consumer loans out there in both the banks and the finance world are attracting the higher rates. How can we go in the opposite direction when we are raising the same dollars to lend from the same groups of people. It will not work.
There are people, for instance myself I am a financial idiot if you look at it, I just put my money in the bank and I get it out again. I don’t even worry about rates of interest. Mostly the Commonwealth Bank makes money out of me.
KB: That’s true, but generally credit unions don’t have the same volume of people that the Commonwealth Bank has given them all this free money. I mean we ???????????? and we look at our scene very closely. Obviously within the credit union framework all of us today exist on lump sum term deposit money, because the general flow of savings type money will never keep you afloat to fund and do all the things you need to do. Our cost structures, by our very nature, are certainly higher from my point of view than a lot of the banks and we do not have that free flow of money that they certainly still possess.
But surely that is your fault, because you and the actual movement is servicing a particular type of the market. They are servicing the people, the public servants and the people in large businesses who have pay-roll deductions and they have superannuation and such like, they are not servicing other people. It is because they are only looking after that segment of the market that is their strength and it is their weakness.
KB: You can have strength in numbers, but those same people are finding it just as difficult to live today. If you really get the true facts and figures in credit unions, you will find that there are fewer people holding more of the money today than ever before and those thousands and thousands of ordinary people are finding life very tough. What they put in by pay-roll deduction today goes out today. That is the reason of my comment that if we are going to fund loans, and the demand is there, that money has to be attracted from the larger leaks of money. That is costly and I am yet to see a credit union person prove to me otherwise. There are exceptions, but the general rule is that credit unions today have a need to exist on fixed term high price money. Pure economics. We work hard, we work hard to attract savings but the statistics will tell you that savings everywhere are low.
Well, that is the end of the tape is that the end of the interview, on that note?
KB: Yes, I have had a good waffle on.
You have given me a lot of good historical information.
KB: Hopefully so and I am very happy to be party to this history.
Well thank you very much, Mr Ken Byrne.
End Tape 2b: 4683 Words: 1 hour 40 minutes.