27 FEBRUARY 1992: VCCA36: RICHARD RAXWORTHY TALKING TO PETER HODGKINSON
I will ask you Mr Hodgkinson where were you born and when?
PH: Orange, New South Wales, 29 August 1940.
Did you grow up around there?
PH: No, only six years. I doubt that I would know anything of it.
So what do you first remember?
PH: Melbourne. Essendon 1946, shifted to Balwyn in 1947. Shifted to Surrey Hills in 1951. Got married in 1969. Shifted to Doncaster and still there.
School?
PH: Balwyn 1947 to 1950. Holy Redeemer, Surrey Hills 1951, Marston College, Camberwell 1952 through to 1957. Matriculated in 1957.
Did you like school, were you good at anything?
PH: School was just one of those other things that filled in your day. I was not good at sport. School was all right. Didn’t think I would get matric until the Brothers said, ‘If you put your head down, and arse up we will get you through matric.’ So the last six months I worked and got matric.
The place you went then, what did you like there?
PH: Work. I only went into work for the week before Christmas to see what it was like in an accounting office. It just happened to be my father’s office. Thirty-four years later I am still there.
You did tertiary study part-time, did you?
PH: Yes part-time. A couple of years at the uni, accountancy with Ollie T Ebbles round in Flinders Street.
When did you first hear about credit unions?
PH: May 1965, the first I knew about it.
How did that come about?
PH: They were forming one down at the church at Balwyn. Everyone goes along to the church parish meetings. Go there and somebody said, ‘We are forming a credit union, we need a Secretary, Hodgkinson moved. You are it.’ That was the first I new about it.
Why did they do that?
PH: I don’t know, because the boss said, ‘You might as well take some time off and do it.’ The boss being my father.
What sort of influence did you get from him then?
PH: Well I learned my accounting skills and techniques from him. I only worked for him. He died and I still kept on running the business.
Did you get on with him?
PH: Yes. We fought and argued, worked with him, for him and against him. Trouble is you either had a boss twenty-four hours a day or a father twenty-four hours a day.
I was in the same situation when I was a kid. What sort of influence did you get from your mother?
PH: Oh just the normal homily, motherly, maternal facilities, that is all.
Was your father political? Did you get any influence in that direction?
PH: Yes. He was in the ALP until he was expelled. Then the DLP came along. They were the 1956 factions and politics went along in much the same vein from that, from a religious background.
Did you get involved in any of that, or were you too young?
PH: No I hadn’t even left school at that stage, so the 1956 fights of the Labor Party, 1955, I didn’t know about. I have since read about because of the movement my father knocked around in both in CYMS and the Labor days, knew a lot of the blokes. Stan Keeogn, Frank Maddison, all of those.
What about the YCW?
PH: No, didn’t get involved with that. I couldn’t play football.
I mean the co-operatives?
PH: No. Didn’t get involved with that at all. It was just the start of credit unions, or credit co-operatives as they were called back in those days, under the auspices of the ACCS.
When you got involved there, you had the books wished on you did you?
PH: Yes. If you are Secretary therefore you do the books. You are Secretary cum Treasurer of the co-operative and do everything. So you work out of your bedroom at home and do all of that on Sundays and whatnots.
You operated on Sunday after church?
PH: Yes. That was there until 1967. Then I got involved in going to VCCA meetings, or ACCS meetings. That was the end of me I think.
So what was happening when you got the VCCA? How did you come on the Board? Who suggested that you go along?
PH: All started back in 1966, talking subscriptions. Always a vexious question in the movement at all stages. They were trying to work out a formula for setting subs and I got on to that. Either I did it right, or did it reasonably well, then the next vacancy, the 1967 Board Meeting, they nominated me to go on the VCCA Board.
Were there factions re subs?
PH: Yes. The subs factions, the group of three, led by Ted Lamb with ACOA, SEC at that stage and Latrobe Valley mooting that it was Catholics versus the rest and that the subs should be set so they are all equal. That was the sort of the start of the melding of the two together.
So when you were on the Board in the first instance was it the Association of Catholic Co-operative Credit Societies or was it the VCCA?
PH: At that stage, just trying to think now, I would have said it was ACCS when I went on and maybe the next year it was VCCA.
1966 was the start.
PH: So 1967 I was on the Board. It was 1966 doing the subs work. Then it became VCCA and I went on the Board, that’s right. It was setting the subs for that time.
Did you actually go to the meetings when they decided to merge?
PH: Yes, the voting at the meetings, we were at those. They were up at Isabel Younger Ross in St Kilda Road, the one in St Kilda Road, the meetings. The Nurses’ Home. Yes.
Do you remember any arguments with Stan Arneil when he was going to come down and forestall this by starting another association, or a league?
PH: There were rumbles and rumours about that. I didn’t get involved in the politics of the day. I just stayed and did my bookwork and that was it. So many things kept going on within the movement that it was hard to determine what was fact and what was fiction and who was basically saying what to discredit whom.
Now, I understand he was working independently, that he didn’t sort of do it with malice or anything like that. It was just that he was working within the union movement, with the Labor Party, and they were doing that in New South Wales.
PH: Well I don’t know what New South Wales doing.
Did the same in Queensland as well, working through the union.
PH: No, I didn’t get involved in those politics. I understood some of it. Those who were in deeper than I, before I knew what was going on, but I stayed out of it.
So when you got on the Board then what were the issues?
PH: What were the issues? I will have to think. Apart from subs, that was the main issue of people joining, a dollar a head or whatever and related levels. Then it became just legislative issues, were the issues of the day, plus joining AFCUL and paying your levies there. Politicking down here on Stamp Duties and what not. From the 1960s into the 1970s.
Were you part of the delegation that went to Sir Henry Bolte over the Stamp Duty?
PH: Yes, I was part of that. We sat and worked down at the VCCA, down in 182. We did everything there and then we went to Sir Henry and somewhere along the line I called him a liar. Dermot was with me and he gave me a kick under the table and nearly broke my leg. He said, ‘You can’t call Sir Henry a liar.’ I said, ‘He just told lies. I can call anyone a liar who does that.’
Ralph Lewis said something about Dermot asking Sir Henry, ‘Can I have one of your fags?’ Do you remember that?
PH: Oh there was some vague thing. It is like that other story of Benson coming out of a meeting up in Canberra saying, ‘What did you get out of it?’ He said, ‘I got a box of matches.’
He said the same thing at Toowoomba on that.
PH: They were the days. At least you knew where you stood with Sir Henry and the Bread Bill or whatever it was, that was one cent, and ten dollars receipts duty got amended out of those Bills. Whether we were instrumental or not is another thing, because the general industry was against it as well.
Were you on the Legislative Committee?
PH: Yes, in part.
At the time when you were pushing towards the Act?
PH: Which Act?
Can’t be 1953, can it, must be 1969, or is it?
PH: No the Amendments to the Co-operation Act were 1979.
What all the way from 1953 to 1979?
PH: Yes the main legislative framework was 1953. 1958 there were basic amendments and 1976 were the amendments.
That is when the reserve came in?
PH: That is when the Reserve Board came in.
That is going ahead a long way, so let’s concentrate on the 1960s for a start. Had the push to enlarge the parish credit unions into community credit unions started?
PH: Yes that was on then. That was a target and a framework to push for expanded parish communities and try and get them to go to communities. At that stage, through the VCCA, form industrial credit unions and give a bigger base for industrials.
At that time was central banking starting?
PH: Well we always had what was tantamount to a central bank through ACCS to VCCA, which was just lodging deposits and then borrowing back from it. The main thrust of a central bank was in the 1970s, the beginning of the 1970s, when the main thrust of everyone trying to bank with the VCCA and draw on it started.
Were you involved with the writing of the Equitable Mortgage Contracts, or anything like that?
PH: I think that would have been John Galvins forte. You are not supposed to draft up third-party contracts.
Yes well in New South Wales I think it was 1963. Don Harvey was the one who got it from Canada originally. Then they had to change it slightly to fit New South Wales. I was trying to find out who did it here.
PH: Well I would imagine that they would have taken Equitable Charge documents for lending on credit unions, or credit societies as they were called then, that would have been done through John Galvins’ office. Taken from the drafts there and amended to allegedly suit the conditions of the day here. They were basically just a charge over the undertakings and assets of the society and no-one really worried about them. Half the time they either weren’t signed, sealed or stamped. No-one enforced any of them.
It was lucky they didn’t need enforcing isn’t it?
PH: Everyone was more honest and you had less value of money to play with in those days. It was a big deal to lend a credit society $10,000.
Which brings us to the point of the Stabilisation Fund? Were you involved with that?
PH: Yes, I was involved with that. I was on the Committee for the Stabilisation Fund until I got off it, or was removed from it, or removed in ????? therefrom because I disagreed with the way Don Harris and Brendan were directing that. I didn’t agree with what they were doing in many cases with it. So then of course you are off-side.
What exactly were your objections?
PH: I have got to think. I may have to go back and read some of the Minutes and decide, because after that period of time you just block it out of your memory. Just the manner of lending to people, or lending to societies without checking them. Alternatively, imposing adverse conditions on societies that just could not operate. The Stabilisation Fund at one stage wasn’t paying interest, and I objected to that. I said that it should be paying interest, because the credit societies having put their money into it, should in fact get some of their money back. The Stabilisation Fund converted across. Money was paid out but no interest was paid to anyone and no-one could explain where the differential went to, which I disagreed with.
The Stabilisation Fund here was operated in a different way to New South Wales, and in a different way to Queensland I take it. The Queensland one gradually had to pay out everytime a credit union amalgamated. The one that lost money by the amalgamation was paid out until they didn’t have any left. Then they started another one. Whereas in New South Wales they had a capitation arrangement, so much a head per credit union.
PH: We had a percentage of assets going in. Then that was to be administered and looked after and protected. The Stabilisation Fund should then only either make a grant or give assistance to ensure that the credit union could get out of its difficulties quickly. Alternatively, if there was going to be a loss or a wind-up, when that was completed then it would pay out the differential of what was needed. Instead of just seeding the whole lot with a great lump of money and hoping you would get something back, let it flow through either to liquidation, wind-up, or whatever and then pay out anyone who was required to be paid so there wouldn’t be a loss by anybody.
There wasn’t a loss in Victoria. There was in New South Wales. Two credit unions disaffiliated and they went down.
PH: In Victoria, under the Stabilisation Fund components, no-one disaffiliated and no-one went down. No-one lost anything. Then under the start of the Guarantee Fund that I was on, with the Reserve Fund, the first three ones there were Werribee, Geelong, and one other, there were three. Just trying to think what happened with those. Werribee had to be closed down anyhow, had to get paid out.
Didn’t they amalgamate with Laverton?
PH: Oh, I know they went into Telecom ultimately. But there were three liquidations going on at that stage. We were trying to get tax rulings on to what would happen and when the money was injected into it. At that stage Statacts, or Topcos Credit Union, Pace whatever it was, Topcos bloke said, ‘Well what happens if it is your credit union? You had better make a ruling so that no-one has to pay tax on it. Otherwise there will be less money into your credit union if you got a crash.’ I just can’t think off-hand what happened to those three, but I know there were three that started the write-off at the end of the Stabilisation Fund before the Reserve Fund came in.
Do you remember the tax cases at Federal level?
PH: I wasn’t involved with Revesby, because that was all run from Sydney.
Father Gallagher. You were on the second one, I think that was Waitara.
PH: I got involved with it with Dermot on this formula, Section 23(G) in the Income Tax Act, whilst the Income Tax Act was amended. I didn’t disagree with that. I just said you would have problems in determining what it was. Dermot kept putting out this formula to associations to tell their members to follow and I disagreed with it. I have subsequently disagreed with it ever since and have never used it. Yet I have been able to obtain refunds for various societies by not using the formula, when they were starting to pay tax.
Well Jack Lange got a ruling and developed that formula. But he admits it didn’t work.
PH: I bastardised the whole thing and I use it to my own advantage because I have determined what answer I want. I mean I don’t work through the law, the Tax Law, to say will this give me an answer, which is much different on a piece of paper and saying this, this and this and use that.
Were you involved in the Water Board case in Sydney and the South Australian case?
PH: No, I didn’t get involved in either of those. They were run by AFCUL and you only got on to the end of those at the finish. I argued with Dermot on his negotiations because he kept saying to us from AFCUL level, ‘I can’t tell you what I am negotiating with the Commissioner.’ I said, ‘Well you are not a tax man. If you can’t tell us what you are negotiating with, how do we know that what you are going to get is right?’ That is when the 23(G) clause came into the legislation. Whilst it is reasonable, it is not the best basis for exemption for tax purposes. But it stopped a lot of people from writing off bad debts, because they then didn’t have to write off bad debts to get tax deductions. That was one of the bad parts of it, but everyone said, ‘OK, if we don’t have to pay tax we don’t have to worry about writing bad debts.’ Whereas in prior years, whilst you had to pay tax, you wrote off as many bad debts as you could find.
When that was eventually negotiated politically, were you involved with any of that?
PH: Not directly. That was Dermot and Frank Crean. There was an announcement down at the 1974 Hobart Conference. It was announced down there that we were going to get tax exemption.
There was more to it than that. I mean Vince Martin was the Member for Banks. He was also a tax man. So was Crean, for that matter. So they all knew what they were talking about.
PH: Well I don’t know if Frank Crean knew what he was talking about, in inverted commas.
I got him on the phone when Dermot died and asked him about these various things. He just hedged all around. He just said, ‘If he said it, it must be so.’
PH: But they did their political negotiations and it wasn’t open to many other people to get in behind it. Vince was doing his thing from inside Parliament, but then he is constrained by the provisions of his own Party and also of Government and in what he can and can’t do. So that is just the way that goes. But the provision as it stands isn’t too bad for credit unions. But one day they may lose the exemption anyway if they don’t do it properly.
So as far as the Stabilisation Fund was concerned, you were on the Committee for a while.
PH: Yes I was on the Stabilisation Fund Committee.
The Legislative Committee. What period were you on that?
PH: Oh. In and out of that. When it came to 1977, 1976 legislation, I wasn’t on it at all, in fact I was told to stay away from it. That is when I objected. When I came back from the World Council land saw they negotiated this Bill with the Government, I took one look at the Bill, sitting in this room here, and I said, ‘You’ve got to be joking? It’s just bad legislation and you’ve got to oppose bad legislation.’ Benson sat at the end of the table there and said, ‘No you don’t. We’ve told the Government it is going through without objections, from anyone.’ I said, ‘You can’t do that. Once this Bill becomes public and it is read a second time in the House and it is available to everyone and other societies read it, they are going to scream.’ He just said, ‘No they wont. We have told them not to.’ I said, ‘Well stiff luck, my society when they look at it will, I assume.’ That was Doncaster. When the Bill came up and it was available for open scrutiny, we took one look at it with out Board, we wrote a three page letter to the Government and that is when the shit hit the fan. That is when I got in the dog house with the system.
So what happened? Did the Bill go through as it was?
PH: No, it got amended. That is the peculiarity of it.
But they didn’t forgive you for it?
PH: Didn’t forgive me.
Were you on the Board at that time?
PH: I was on the Board. The letter that went to the Minister was in respect of my own society. Nothing to do with anyone else. The original letter just said that the Government could allow societies to go broke legally. I got a three page reply back from the Minister saying that they are going to attend to the matters that I had raised. That was the peculiarity that I couldn’t understand that I got disciplined and a vote of no confidence passed against me. That was the beginning of the end, because everyone said, ‘You can’t do that. We’ve told the Government no-one is going to buck the system.’ I said, ‘I am sorry about that, but I don’t agree with that.’
Fair enough.
PH: As a result of that, which was part of the legislation to set up the Guarantee Fund, they finally put me on the Committee to shut me up.
A steering committee was it?
PH: No, it was on the General Reserve Fund under the legislation. So I finished up on it, the very thing I was criticising.
How did it work?
PH: Oh we worked all right as a group. We sent in train what they have now got as the Guarantee Fund anyway. I only had three years. That was my second fight with them, when Warren Johnworth said to us at the February meeting that we would be re-appointed. The following month I got a letter in the mail enclosing a cheque for my fees to the date of my resignation. That is when I blew my stack the second time and I said, ‘I haven’t resigned.’ I rang Warren up and he said, ‘Oh yes I forgot about that. I have told the Minister you have resigned so you had better give me a letter.’ I said, ‘You are not getting a letter from me, I haven’t resigned.’ It was all political.
How did you get on with Warren Johnworth before that?
PH: Oh Warren is all right. I haven’t seen him for years, but he was all right. He was a generous old soul as a public servant is and didn’t want to rock the boat anywhere.
I have interviewed people in various States about the different lead ups towards the Reserve and the various Savings Protection and Savings Stabilisation Funds. Now in Queensland they sort of negotiated in a hard way, but nonetheless they didn’t force anybody into positions. In New South Wales they did. They actually sometimes used to turn up with the Registrar and an Administrator and a Stabilisation team on a Friday afternoon. Change the locks on credit unions and open up on the Monday morning. They lost two credit unions where members lost money. But in Victoria, and in Queensland for that matter, they took the softer line and no credit union member lost money.
PH: No-one has lost money in Victoria at all, despite the size of the losses. At least we can say that vis-a-vis Pyramid or anyone else that because of the self-discipline, or self-regulation that we set up, even though it was ultimately imposed on us by the Government, we created a fund which is positive in its aspect of providing funds to credit unions that are sick or ill. Those that have gone down, they have either been amalgamated, absorbed, and the fund has been able to sustain the losses so that no creditor or depositor has lost one cent.
Now how would you apportion the plaudits, shall we say, for this? I mean Johnworth, was he helpful by being the way he was? He could have been like they were in New South Wales and just marched in and changed the locks.
PH: Well Warren didn’t have that sort of ruthlessness in his body as a Registrar of Societies. He was a long time standing public servant. I think hopeful of getting a knighthood one day so you don’t rock the boat. His father didn’t rock the boat when he was in the public life and I think Warren went the same way. If you can smooth the troubled waters with Warren he would go the easy path. Whilst the Stabilisation Fund and the Guarantee Reserve Fund wasn’t bad, the way the legislation was drafted they left the loopholes in it and that’s what I was objecting to. I just said, ‘Clean the loopholes up and I don’t disagree with your legislation. But don’t leave it as it is.’ All Warren said was, ‘Well, we will fix it up in five years time.’ I said, ‘You do it know, not later.’ So that was the VCCA’s attitude to be, that they passed a vote of no confidence in me because as a Chairman of another society I dared to write a letter to Members of Parliament objecting to a piece of legislation that was going to be imposed on the industry. For which they didn’t bother to lift the vote of no confidence and that is when I quit. After I got re-elected as a Director and appointed as the Treasurer of the Board and I said, ‘Well that’s it. You won’t lift the vote of no confidence in me I can’t work here.’
So over the years you were on the Board with quite a number of Chairmen weren’t you. In 1966 that was Tom Stubbs.
PH: Tom Stubbs. That is when I came in initially, 1967.
What was he like?
PH: Tom was a hard man. I remember going to the Annual Meeting at Box Hill in 1966, or 1967, and got up there and made some comments about credit union looing at CUNA, CUNA Mutual, CUMIS insurance. Tom Stubbs said, ‘You can’t talk like that at our meeting. If you ever apply for membership here you will be refused.’ So I did and I was.
Why did you?
PH: Just to prove the point to see whether they would not carry out their co-operative philosophy of charity to all people and the fact that I qualified as a member in their bond area. But they refused it because they didn’t like the way I spoke.
You were involved in the CUNA Mutual, CUMIS business?
PH: Yes we had meetings with Stan Arneil and Romeo what’s his name.
Carlos Matos?
PH: No before Carlos they sent another bloke out here. Rome De Michelle. I am trying to think of his name. He went to Africa after that. About the set up of CUMIS, CUNA Mutual here in Australia and the shenanigans going on between here and overseas. The fights that they had, I tried to stay out of all of that. Benson was the man who was overseas and he had contacts with all these people and he told the Board sometimes what he wanted them to know or what he wanted them to believe. So I found it very hard to find out who was telling the truth in all of those politickings.
End Tape 1A: 4635 Words: 1 hour 50 minutes.
27 FEBRUARY 1992: VCCA36: RICHARD RAXWORTHY TALKING TO PETER HODGKINSON
You were involved in AFCUL at one period?
PH: In AFCUL in 1972 through to 1976, 1977, thereabouts.
The insurance issue, did you get involved in that?
PH: No not to that extent. Most of that stuff emanated ex-New South Wales and Victoria was just on the tail end of it all. I didn’t seem to want to get involved in it because I didn’t think it was part of my portfolio on the Board or whatever. I just left it alone with the other people doing the in-fighting along the line, the Managers particularly, of credit unions. Managers meetings I let them fight it all out. If they were selling that from the shop floor to their members, they were the ones who had to be more satisfied with it.
What about the problems. Dermot Ryan was helpful in getting the tax exemption put through. But they say he resigned due to ill health. But I believe he was forced to resign. Did you know anything about that?
PH: That was in 1976, 1975?
1975 was his farewell. So it must have been right after 1974, which is when he was forced out.
PH: I was trying to think when I went off the AFCUL Board. That was another bun fight. I went off the AFCUL Board in 1976. Dermot would have left then in November 1975. That would be right.
But his farewell was actually at the 1975 AFCUL meeting in Canberra. I have got that recorded on tape. Or was that in 1976.
PH: I think that would have to be 1976. They would only do a presentation after formal resignation. The were running around the Gunsing Motel in Randwick, running round with Jack Coyne and Dermot and Jack Lange. So that was then. Then they finally made a resolution to pay Dermot monies and get his resignation.
Were you there at that time?
PH: I was there at the meeting.
So who was after getting him removed?
PH: I think it was a combination of things. I had a go at removing him back in 1973 at the Hobart Conference, sounds like talking about ALP politics at the 1954 Conference, because of the statements he made to my wife and the fact that he called me a fucking liar as well. That I had nobbled him with legislation with Sir Henry Bolte or something or other. It wasn’t because I was away working and I wasn’t in attendance. Les Harcourt was the one that went to the Government of the day on the matter. He abused shit out of me and I just said, ‘I’m not going to put up with that. Tender your resignation or I will call a Board meeting.’ I ultimately called a Board meeting only to find that all the Board members had gone to a World Council meeting. Nobody had bothered to tell me that. So I set up a room at the Travelodge Tullamarine, I had the place booked. I sat there for an hour and a half and I got a phone call from Jack Coyne saying, What is this all this about?’ I said, ‘If you read your Minutes you will know there is a meeting. I convened a meeting pursuant to the Articles. No-one showed up. That’s it. There is the agenda. No-one wants to touch any of it. No-one wants to talk.’ I said, ‘Dermot should have gone years ago.’ I said, ‘You are going to have to face up sooner or later that he is running you, you are not running him and he is getting drunker and he is not doing his job properly.’ So that was the start of my slide in the industry, because I was trying to buck Dermot, or buck the New South Wales system.
You felt that New South Wales was running AFCUL?
PH: Yes. I kept putting up motions, well not only me, through the VCCA putting up motions that we disaffiliate from AFCUL if they didn’t restructure their affairs because we were paying too much money in subs and we weren’t getting any value out of it, neither was the movement. We were having a hell of a lot of high priced piss ups all around the countryside which could be better utilised elsewhere. Instead of flying everyone up to all these big seminars, bring the speakers down to smaller ones and cover everything more effectively. But no-one wanted to listen to it that way. You have all got to have these big five hundred, six hundred people attend a week’s conference and you don’t do anything else except sit and drink.
So what happened the following year?
PH: Well in 1976 they nominated me as a representative to the World Council and so I went there for four weeks, May 1976 to Colarado. I thoroughly enjoyed my time. I had a week with the Californian League and I enjoyed that and had a real good insight into how credit unions were operating there. They run a more parish-type operation of small community facilities and they had the same problems and difficulties as we had. Then after the conference I went up to British Colombia up to Vancouver and had a look at their operations, including their central bank, for a week and got some insights into that. I wrote a part of a report for the VCCA. I came back and they asked me to put a thumb-nail sketch of my trip out for the movement, just as a bit of an overview and a precise. So I wrote that and the day it was printed, Bruce Smith, the advertising bloke, rang me up and said, ‘Benson has just come in, read your article and all these copies are being pulped.’ I said, ‘Keep one for me.’ He said, ‘I have already put one aside for you, but all the others are taken.’ That never went out and all I basically said in it, which I am told Benson objected to, that I question the Registry here and all I said was, ‘The degree of expertise and dedication of these officers,’ that is the National Credit Union Administration in Washington, ‘was in marked contrast to our own Registry officers. Much of their efficiency has been developed since 1970 when the NCUA was created a separate Government Agency in its own right, having previously been a minor part of a government department dealing with health, welfare and education.’ I thought that was fair enough. But however you are not supposed to. They are in the business of getting this Guarantee Fund legislation through and they didn’t want any comparisons, odious or otherwise, of the Registry. So my second paragraph, which I was crucified for, was:
If we have to learn any lessons from our overseas counterparts it is just this. Unless Victorian Credit Union Movement throws of its conservative shackles and overcomes the current phobia of problem credit unions and deficits, the only problem seeming to be incompetent Directors and/or inefficient management both of which can be changed overnight, and work together to develop and utilise an electronic data processing facility coupled with a vigorous advertising and promotion campaign in the next six to twelve months, then the movement as we know it could well self-destruct inside two years. Which I thought was fair comment at that stage. Most of which has borne fruit. But you can’t say that in print according to the Godfather, Mr Benson, who just happened to see an early print copy of it and said, ‘Sorry, that doesn’t go out to anybody.’ So I said, ‘Well you are not getting my report on my overseas trip either because it will just be an amplification of that. So what is the use of writing it if you are not going to read it or publish it?’
So what happened to the issue?
PH: That got pulped, I am led to believe. I have got one copy and I think it is the only copy in captivity.
I would like to get a copy for the current VCCA history project and for the Historical Co-operative if I can?
PH: Well, I have got no objections to giving it.
I mean a photocopy.
PH: Yes.
Well as a matter of fact Bruce Smith was in here yesterday, last night. He didn’t mention that.
PH: Well since that doesn’t exist, how do you mention it?
Very good. You mentioned events at the Glensind Motel with Dermot and Jack Coyne, or Jack Lange and such like. When did that happen?
PH: That would have been the May. When did he resign, November 1975 was it?
I think it was somewhere around there.
PH: I was at that meeting where the formal resignation was tendered. But everyone kept on walking in and out of doors and Dermot was sitting outside and the Board was arguing about how much money they were going to pay him to quit and smooth troubled waters. How much it was worth to keep cohesion in the movement. I am not quite sure how I voted on the resolution, that is a long time ago.
Was there any objection about how he was running the actual AFCUL office or was it merely his personal style?
PH: I think it was more personality. I think Marg ran the office, most probably a bit under direction of Dermot because she wouldn’t have a word said against Dermot. Yes in his own right I didn’t find Dermot objectionable. I had some good times with he and Meg out at their place when the office was out at Lidcombe. But it was just sometimes the demeanour and the manner and the attitude of doing things, which didn’t sit well with me, that we got our hackles up. Finance was one of them and I thought that costs were excessive on occasions. But when you tried to bring it to people’s attention you were told to keep quiet. But then again, some people say that about Mrs Kerner or Mr John Cain in this State. It is exactly the same thing.
There is one other aspect there, the Trusteeship of the Foundation. I know you were critical, because I read the Minutes of AFCUL, of his handling of the Foundation. Do you remember that?
PH: Vaguely. I have always been critical of Trustee monies, because I have always maintained, in this industry you can do what you like with your own money, but with someone else’s money you have to be very, very careful. I don’t really care what it is that I do, but if it is someone else’s money, even my wife goes crook at me when I come home from bowls after pennant, I am counting the cash from the pennant day and that has got to balance. When I write my receipts and I give people receipts and I don’t care if they throw them in the waste paper basket, but I have accounted to them for the money I have got. Then it gets banked forthwith. But what happened with Trustee monies and whatever receipts weren’t issued and monies weren’t always banked and expense vouchers couldn’t be produced. But everyone said, ‘It’s all right, everything is balanced. There is no problem.’
But your objection in that instance was they were spending capital as income.
PH: That is on the accounting techniques as to classification. I say OK if the ?????? comes in and people have put it in to build up the capital, then you shouldn’t be spending that. But Dermot always seemed to have a reason for spending because this was a needy case and therefore we had to eat into capital. I said, ‘In which case, we won’t have a fund.’
At that time also they were trying to start Aboriginal credit unions and also operate the Foundation in Australia. Did you have any objection to that, or was it just a matter of the accounting?
PH: A matter of the accounting really. The fact that they were setting up co-operatives I didn’t disagree with at all. It was generally in the financial arrangements that were being set up. I am trying to think there was some place they were going to or doing something or other. Was it up Walgett way?
Yes it was. What they were doing up in Walgett, there was a Walgett Credit Union operating out of the Shire Council, they were after making that a community credit union open to Aboriginals. The local Shire Clerk wanted to do it, but it didn’t come off.
PH: Yes I vaguely remember it. Time dulls the memory on this type of thing until people start jogging it.
You went up there?
PH: No, not to Walgett no.
What about Queensland?
PH: No. The only times I went to Queensland were AFCUL AGMs. I didn’t do any politicking or lecturing, or talking to any credit unions on that basis either in New South Wales or Queensland.
Did you go to any credit union Schools or lecture at any credit union Schools in Queensland?
PH: No, none at all.
South Australia?
PH: No, only the AFCUL meetings.
Right, well we had better come back to the VCCA here. Were you involved in any of the Chapters?
PH: Yes, setting up or participating and talking at Eastern Chapter, which was the Doncaster area one. I am still a member and do the books for it.
How many organisations do you do the books for?
PH: That is the only one I do. I stay out of all the others. The local ones I just do their quarterly statements for them. Not getting too involved in Chapters. Either attending as a liaison officer for the VCCA and trying to explain VCCA policies and principles to groups of people. Chapters information meetings pre-AGMs were the one thing that I hated, because no-one got the same answer twice in two different places. I always thought the AGM was a basis for debating a question and a motion, not having a cell group in six different areas all getting six different answers and then everyone saying, ‘Well you have all heard the arguments over the last three months, now all those in favour of the motion?’ I never agreed with that at AGMs.
Well you wouldn’t agree with New South Wales either. What Ken Miller used to do. The objection to Ken Miller was that he used to make his mind up before hand. Then he would work for that particular point. He would give people a time cut off and there it would be. But he was regarded as dictatorial for this.
PH: I only watched him at one Annual Meeting in Sydney down at the University School. University House down Anzac Parade, somewhere or other.
Unisearch House?
PH: Yes that’s it. I went there one day. There was a full day meeting down there so I went and attended that to see what New South Wales meetings were run like. They were basically no different to ours. They were still fighting about subscriptions there. We had solved our subscriptions here in the VCCA round 1972, or 1973. I’d put up a new proposal for subs instead of being on dollar per capita, I used an exponential formula rated to at that stage on loans. I think the Association should have kept it up and reviewed it later to take in assets, because the only thing that credit unions made money out of were their loans. No one was into buildings or big equipment so I said, ‘OK take it on that and we will take it as a loan value volume. If you aren’t not making loans you are not going to have any money to pay subs. If you are making loans then your rating will be to the income you derive from those.’ It worked well down here in Victoria. We had less hassles over subscriptions at meetings, whilst New South Wales were still fighting over a dollar a head or a dollar thirty a head per capita, plus AFCUL plus this, plus that. The ability to pay was going out the window for them. We overcame it down here and we had less problems at AGMs on working that out.
What about the time when the VCCA ran into problems, financial problems, over Jubilee Lake and Teledata, were you involved at that stage?
PH: I was involved with Jubilee Lake. I was involved with that from the inception, which was 1974, 1975.
Who started it?
PH: I don’t know who started it. The fire, that is at Warburton, I have no idea who started it.
I don’t mean that.
PH: That is what started it, that was the catalyst for Jubilee Lake. There was no convention centre that was around that was reasonably close handy and cheap. Then Great White Father Benson said, ‘Well why don’t we form our own?’ At that stage it seemed like a good idea at the time and I still believe that it was the best thing that the VCCA, apart from building this building however they sold it and it was part of building this at that stage. We set out on doing the Jubilee Lake concept. We had it right. It was just that we were going through a stage of financial crisis within some of the credit unions. Some didn’t believe it was an area we should be going into to, weren’t prepared to commit money having just built this and then put more money into Jubilee Lake as an unknown quantity. But I felt that Jubilee Lake was the one thing that would have saved the credit union movement and given it a good base for total income support and a good asset base. I think that Daylesford was the right centre. We had a look at all of that. We spent three-quarters of a million dollars on it and it all went for nothing ultimately, although we did give eighty thousand dollars to the Daylesford Council basically for nothing. So Daylesford must have got something out of it in the long-term, apart from the six hundred people at their information meeting when the towns people agreed that this was a good thing for the town. But in the light of today’s economic climate and training guarantee levy schemes and education and training generally being imposed on by State and Federal Governments, no-one can find enough training centres. For the two and a half million dollars it was ultimately going to cost the movement, we could have recouped that ten-fold now. But that is with hindsight. But even with foresight it is something we should have persisted with. But the closed shop mentality of people on the Board weren’t prepared to risk their money. Yet we had capital lined up. We had everything set to go. The day the bull-dozers were going to start was the day we closed. Yet this credit union centre here, we had this half way up and I suggested for an additional sixty thousand dollars we could have put the other two floors on to it and made it a really worthwhile investment. But no-one was prepared to back it and said it was too expensive. It was ground floor, first and second and basement, but we had the permits for the other two floors and we had the footings already in for the other two floors. We were capable of putting the other two floors on and finishing the project on time for about another sixty or seventy thousand dollars. But the Board didn’t want to go that way but they could have made maybe another million bucks on the sale of this building for that.
They have sold it now have they?
PH: Oh yes they sold this four years ago, maybe even longer. They had a liquidity crisis after the 1981, 1982 problems. In about 1986 or 1987 they sold it.
Did you get involved in the Teledata problems?
PH: No wasn’t in to the computer side of it, didn’t want to know that. I listened to the debates on FCS or Teledata. Didn’t understand any of that. It was just one of those situations that went from bad to worse. People then having been hooked into Teledata had to stay with it otherwise it was going to cost them more money to change. Then the FCS system came in and bought out Steele of Teledata. Then they went from there. I don’t know how good or how bad that’s gone or is going, because I have had no involvement with the financial records of FCS or AFCUL over the last five or six years. I don’t even read the stuff that comes out from the Doncaster Credit Union because it doesn’t directly affect my area of operations with them, which is just doing their quarterly accounts.
I haven’t heard a word against FCS from anybody.
PH: The only thing I would say in relation to looking at it from Doncaster’s view point that they charge like wounded bulls on all their software enhancements. It is a hell of a big program that they have got, but I think that some of it is not really required for some of the small credit unions. But you have got to buy the whole lot, it is all or nothing. So therefore you have got a Rolls Royce doing a Fordson Tractor work in many cases.
I tried to get a word with Brian Dean the other day, but I didn’t manage it. He was always surrounded with people who he was selling things to. That was at AICUM at Albury and I had to come down here and do my work, so I couldn’t do it. But I have heard Ken Miller’s story of it and Les Robinson’s story. He was out selling it after being retired ill and he got it swiped from under his nose. I think the New South Wales League was probably right to take it, get a hold of it while they could. So what other area were you involved in that we haven’t covered yet, can you think? Were you involved in AICUM or ICUD.
PH: No, none of those. Just VCCA, AFCUL, WOCCU, Jubilee Lake. That is about it, and the local credit unions. That is about all.
Wait a minute, the Reserve, we haven’t really covered that, the fact that you were on it.
PH: Yes, I was on that for three years.
What about the Advisory Committee?
PH: Yes. That is the original General Advisory Credit Societies Reserve, GAF wasn’t it, General Advisory Board. That was the first one set up. I was on that for three years with Ralph Lewis.
Any arguments with Ralph Lewis?
PH: No, Ralph and I work well together. Les Harcourt.
How did you go with his attitude to reserves?
PH: Ralph’s or Les’?
Ralph’s?
PH: Oh Ralph and I saw eye to eye on many things. Ralph knows that I say that. Ralph is a man I respect greatly for his integrity and his honesty and if he asked me for a tenner I would give it to him and I wouldn’t ask him what he wanted it for.
But I understand he never had very big reserves. He used to say you didn’t need big reserves when you had a good relationship with your bank manager.
PH: Oh that happens in most situations. I have got an argument going with the Guarantee Fund at the moment just on Doncaster on the reserves and I say they are more than adequate. But people who sit behind their desk and don’t get out in the real world don’t really understand what it is. But Ralph said, ‘You don’t need reserves. We can create reserves. We can drop our interest rate, we can raise our interest rate. We can stop expenses. We have a credit union base which is stable,’ which was the ACOA consortium. He said, ‘In the light of that we don’t need large reserves.’ This is the problem with the law at large where it starts to impose statutory minimums on organisations which are in the main set up for the members. If the members want it to go broke, that is their prerogative. If they say, ‘We want to eat up all our reserves, but we will chip in if it is going to be needed later on,’ you know most people don’t always come to the party, but with reserves such as a formula for an assessment of bad and doubtful debts under the legislation, I totally disagree that you have a formula. Because if a bloke can’t pay his loan today and he is in arrears from last week’s pay, I don’t care whether he is one week, two weeks in arrears, you don’t say that you should only write off ten per cent of the loan. It is a hundred per cent bad in my book and you make that assessment then, not on a statutory formula. You don’t say that as he hasn’t made three months payments we will only apportion twenty-five per cent of his loan as being bad. But this is what the law is turning people into doing. Some credit unions want to hang their hat on it and say, ‘Well I have got a bad debt problem, but according to the formula we have no problem.’ Now I think that is illogical. But that is the way the law is going and that is what I disagree with, when they start framing laws like that. When they put in prescribed percentage levels into law to say that is what you shall do, when no two credit unions are the same. Same as there are no two industries, shopping centres are the same, or two hot bread shops are the same. They are going to operate on the same principles but they will all do things differently. Therefore you can’t proscribe the law to make each of them equal, because they will be different.
What about the new Reserve, you are not on that any more?
PH: No when it was reconstituted and Jack Patterson got the job as Chief Executive, I got the short shrift and according to the Minister, wasn’t re-appointed. But according to the Registrar I had resigned.
He asked you to resign, he said you had to resign?
PH: He said he had told the Minister I had resigned . That is when I got my letter enclosing the fees up to 14 February, or whatever it was, to the date of my resignation. That is when I rang him and said, ‘But Warren I didn’t resign.’ He said, ‘I know that, but I told the Minister you had. That is why the Accounts Office has sent your fees out on that basis. Can I have a letter of resignation?’ I said, ‘Well you will never get one on the file from me.’ To this date there is none.
So in actual fact you had been fired?
PH: No, the Minister said I wasn’t re-appointed and I had a high importance of being re-appointed when I said I wasn’t worried about not being re-appointed then, therefore my term had expired. But at no stage did I resign. That is what these politicians couldn’t see the wood for the trees. I said, ‘I am not disagreeing that I wasn’t re-appointed, I am trying to point out that I didn’t resign. I was not re-appointed therefore my term office expired and I agree with that.’ But at the meeting on 10 February we asked the question that since our appointments were coming up for renewal, would we be re-appointed and Warren said, ‘Yes, the nominations are going back in and you will all be back here again for another three year term next month.’
And you weren’t.
PH: I wasn’t. Because I didn’t see eye to eye with people.
Were you on the Board with Gerald Lavern?
PH: No, he came in after me. That was where the political appointments started, I think, and the assassinations went on from there. This is what I said in my letter:
Today 18 April 1980 I received a General Claim Form Reg 43 for signature in respect of fees payable to members of the Credit Society General Reserve Fund Advisory Committee for the period 1 January 1980 to 14 February 1980, which indicated that I resigned from the Committee. I wish to state categorically I have not resigned from the Committee. You should know that my letter of appointment was for a period of three years from and inclusive of 15 February 1977. Pursuant to Section 18 of the Act I was eligible for re-appointment for a like term. To date I have not been consulted by the Registrar, nor indeed by the Ministry of Housing as to my re-appointment or otherwise. At fact at a Committee Meeting on 5 February 1980, which appears to be the last meeting of the Committee, the Chairman …
End Tape 1B: 4895 Words: 1 hour 50 minutes.
27 FEBRUARY 1992: VCCA37: RICHARD RAXWORTHY TALKING TO PETER HODGKINSON
There are a number of matters that we have been talking about that we might raise. One of them is the Mother’s Day Massacre as it was known.
PH: That goes back to 1976, the alleged termination of the appointment of Geoff Conrad. 1976, or 1977, I think. When did he go out?
I have got 1977.
PH: That’s right, May 1977, that would be right. I had been in Queensland for a week and came home on the Friday. There was mail that must have come in on the Monday indicating that there was a Board meeting due on the Sunday, which happened to be Mother’s Day. I rang Leon Magree and said, ‘What is all this about?’ He said, ‘There is a Board meeting on to discuss the AGM Rules or Motions that have come in.’ I said, ‘Well I won’t be there for that, it’s Mother’s Day. I am going to my mother’s and mother-in-law’s do as well. I am not giving that up for anything.’ He said, ‘Oh that’s all right, there is no need to come. That is all they are going to do is discuss the AGM.’ I said, ‘Oh well that won’t take long. They will have that over early so they can go home to their mother’s by lunch time, but I’m not coming down, not just for that. Unless there is anything else on.’ It was indicated to me that nothing else was being discussed. Then about Wednesday I think Bob Moffett rang me and said, ‘I suppose you have heard that Geoff Conrad has gone?’ I said, ‘No, when did this happen? He said, ‘Sunday.’ I sort of said, ‘What do you mean Sunday?’ He said, ‘He was asked for his resignation on Sunday. If he didn’t give us his resignation he was sacked and we were going to throw him out of the building.’ That was the first I knew about anything. They told me they would let me know in due course all the reasons why, but I never got. All I saw were highlighted edits of the Minutes of the Meeting for that day, and I think the original of the meeting is stuck in the President’s File, which didn’t fall into the normal Minutes of the Association. To this day I don’t know the facts of it. I have heard scuttlebutt, but I am not interested in the scuttlebutt and nobody has really told me what exactly what happened.
So who was Chairman at that time? Ian Larssen?
PH: Ian Larssen came in as Chairman at the end of that, because that was when I quit in 1977. No I think Ken Ploog would have been Chairman of the meeting. Ken Ploog or Bob Moffett, one or the other.
Bob Moffett 1976. Ken Ploog 1976/1977.
PH: Yes, then Kenny Ploog would have been Chairman.
I have already interviewed him. As a matter of fact a number of people mentioned it, but I don’t think Ken Ploog did. I think Ian Larssen mentioned it. Because I believe it got wished on him to do the actual honours of telling Geoff Conrad.
PH: Yes well that is it, but I wasn’t at the meeting so I didn’t know what happened. Not being at the meeting no-one bothered to tell you for at least seventy-two to ninety-six hours after the event, which I can never understand. But then again that is the way the shenanigans go on in the Board Room, this room here anyway. Then in 1977 when they had their vote of no confidence in me, I was nominated back. I think Keith Glover nominated me back as Treasurer, then they had a vote of no confidence in me as Treasurer and had me removed as Treasurer. Then when the nominations were opened for it one other Director was nominated and the nominations were going to be closed, and another Director said, ‘No, I nominate Peter just to have a ballot.’ The ballot was duly cast and the Board Director who was nominated for the position said, ‘I am sorry Mr Chairman the Returning Officer has counted the votes correctly.’ The Returning Officer was Elva, that’s right Elva Eden. She said, ‘I have counted them correctly.’ He said, ‘No you haven’t the numbers should be six to five for me.’ He said, ‘No, they are five to six against you.’ He challenged her veracity and one of the other Board Directors said, ‘Sorry, I changed my mind.’ So I knew at that stage it had all been set up before hand. So I was back in as a Director and as the Treasurer, but they didn’t wish to lift the vote of no confidence. So I said, ‘Well I can’t work that way. So thanks for putting me back as the Treasurer, but I will tender my resignation now.’ So I formally did so on the 6 August. So after ten years on the Board I gave it away. I think in retrospect they then passed a motion, after they had accepted my resignation, to change the vote of no confidence. To me that was too late. They didn’t have the guts to do it before and I wasn’t interested after the event. There are so many bits and pieces in your files that you throw away that you don’t know just what you are looking at. The Credit Union League which had my photo on the front, it bucked me up no end at that stage. When you sort of feel down in the dumps you get these other little fillips that gave a little bit of a write-up on your histrionics in the industry and what you have done. It is pleasing to see that some people recognise your efforts even though some of the other organisations don’t want to recognise you. Even when I did send my letter in on 5 July 1977 to Ian Larssen, I am still as of February 1992 awaiting a reply. But I hold no animosities to the industry. I think the industry did me well. Allowed me to get up and stand on my feet and speak. It gave me a bit of a grounding out in the hard world against people, to be able to stand up and debate the issues in front of them. I have thoroughly enjoyed the movement in the fifteen years volunteer effort that I put in between Balwyn and Doncaster, the VCCA, AFCUL and those things. I am thankful that I have been in the movement. I have still got my kids in credit unions. I still believe in credit unions. But it is the heartbreak and the anguish of an organisation that espouses Christian charity and then wants to knife everyone in the back. I find it the antithesis on occasions of the lifestyles that people practice. But I have tried to live the way I have been taught to do and the way I have been brought up to do within the Association. I am still thankful I have been in it as long as I have. I have kicked on with some of the fellows, I made some good friends. But since I got out of the industry, I’ve found it hard to keep up with the paper wall it’s generated, always generated. It has always generated a paper wall level that was second to none and it is hard to keep up with all the changes. This interview component here at the moment about a so-called abolition of the VCCA through legislation changes. I don’t think that is a good thing. These things being wished on by government with national laws and legislation, taking away the autonomy of people to do their own things. From an organisation that is supposed to be deregulated, I think we are totally over-regulated. If you look down the list of the people that you see and the Board Directors you have sat with, some have gone to greater things, others have gone to lesser things, and others I have no idea where they are.
There are Managers here. You dealt with Leon Magree in the first place did you?
PH: Leon Magree was the Manager up at A’Beckett Street and I worked with him and did the books with him. Ran up and down Elizabeth Street doing monthly accounts and quarterly accounts. Don Harris, Don was a difficult man to deal with. Came from the SEC. Aspired to every job known to man, but also wanted to get on the Board. Conflicts of opinion and disagreements in there. I haven’t seen Don for a while. Geoff Conrad. Leon Turner, he was Jubilee Lake, he sat in when Geoff Conrad left in 1977, Acting Secretary-Manager of the organisation. Mike Hildebrand I knew slightly. Battled him at Annual Meetings when I was on the floor as a delegate for Doncaster, when I was able to push propositions from the floor that the Board didn’t want to look at. But then they didn’t take them all up either. But Mike I didn’t really know all that well. I didn’t like his style. Phil Elliot, well he was a Credit Union Manager around the place. David Dinning I knew from the AFCUL days. I think the last time I saw David was in this building, walking out, no he was in John Galvins office, he was walking out, must have been setting up some legal documentation and he told me he had just taken a job with WOCCU and was going to Central Africa. That is the last time I saw David. Then of course the other two I don’t know. Bill Mears I never met and Rob Nichols I met last year at the AGM.
Nell Reirdon you certainly knew.
PH: Yes, I knew of her. Got on well with Elva. Elva was a good Secretary. I have seen her a couple of times. Crusty Les is still around. Haven’t seen much of Les Harcourt over the few years after he was on the Guarantee Fund.
Incidentally you were a Treasurer from 1967 to 1972, but you must have been Treasurer for longer than that?
PH: I was basically Treasurer for the Association for the ten years I was on the Board, 1967 to 1977.
Who was the Treasurer before that, because there is no mention of him?
PH: Didn’t really have one from the Board. Leon Magree was the Treasurer and then I came on. That was the restructure of the ACCS to the VCCA.
Who came on after you, or nobody?
PH: Don’t know who even took it, or if they appointed one. I didn’t really take much interest in it after that.
Nothing in the Annual Report.
PH: Well if they don’t label them in the Annual Report then I am not sure.
So you must have been the only one then, officially?
PH: Apparently, if it goes down in the history books like that.
According to that you were the only Treasurer of AFCUL. That is not quite so, but the only one from Victoria. The other ones came from the Sydney.
PH: That’s right. They were based there and I always reckoned if you were dealing with the books or getting involved with the finance you might as well come from the area that is closest to your office. That was another thing with AFCUL that you had that much paper, and you would have it in triplicate every time you did something. You had Minutes, Minutes and Minutes and agendas and printed stuff, you could choke a horse with the paper wall that this industry creates. Instead of getting on and doing the job we generally sit around talking about it, like we are doing now.
Post mortem, but it isn’t quite dead yet.
PH: No.
What about the Presidents?
PH: Tom Stubbs was on the way out from ACCS when I came in. Then Benson was 1968.
What sort of a President was he by comparison?
PH: Well I didn’t really know Tom.
What about Arthur Carter he came in after Tom?
PH: Arthur Carter was on the Board. He sat in there in the vacancies from Benson and Arthur was the old school, public servant I suppose. Hard to make a decision. Benson was the Great White Father and all things to all men, but sometimes he wasn’t anything to anybody. But that is no direct criticism of him. But he just wanted to be everywhere all the time and I think he got spread to thin and that was one of his problems. Kenny Ploog tried to pick up the pieces and hold the industry together. Then Ian Larssen came in with Mr Hildebrand and created or inherited a loss of four and a half million in the industry. When I came out of it I think there were sixteen million dollars of assets making half a million dollars a year clean profit. Then they go into all these other ventures and started to lose money. Then you have got to pick up the pieces because no one wanted to really look at it. Things were just done.
What about Bob Moffett?
PH: Bob Moffett was a hard worker. ABC man. We were working well in those days, 1973 through to 1976. That was the period of the appointment of Geoff Conrad. As a team, at that stage, we generally tended to work reasonably well. Board factions were there, but I think when people aim for higher things and it seemed that other people wanted other people’s jobs then the back-stabbing came into it. That is when politics gets dirty I think. The rest of them I don’t know. Richard Crosbie, it took me a long time to even get introduced to him. I am one of the old style and I don’t go on first name terms with people or anything else unless they are introduced to me. A couple of times he nodded to me across the room and then came over as if I was some long lost cousin and I didn’t even know who he was. He knew me but I didn’t know him. The rest of them are just many and varied when you look down the list of Directors that you served with and for. Some you would give a score of nine out of ten and others you would give nought out of ten for their abilities.
Now on your file there, you had a few other things what we haven’t discussed yet, or is that it?
PH: It was just that this happened to be sitting at work, so as I was walking out of the door tonight I brought this old Association file. The VCCA Bulletin Series 1. The only thing I don’t have is a date on it, but I know it is sometime after September of 1976. That is remiss of me that I didn’t even put a date on it. Because I normally date everything that comes into my office. We were doing something with Doncaster-Templestowe and they were trying to stop us from investing in bank bills because they said we should be putting it with the VCCA and I didn’t believe that. I said, ‘We can put it, under the Act, where we have got to do it.’ The VCCA objected to us investing outside of the VCCA. I said, ‘Well wherever the rates are right and the risk is right, according to the law I can invest anywhere.’ November headlines in the Herald which no one wanted to back me on when I got disciplined and removed from positions, which in law I didn’t think was right, but I wasn’t going to argue about them. I was objecting to the law, or the proposed Bill and the VCCA wants to remove you from all your positions. Took a while for Warren to write to me after that letter.
When you hadn’t resigned, but they said you had?
PH: Yes. Just saying they recorded their thanks for my assistance in those days. Jubilee Lake Prospectus, the one thing that should never have failed, but it did.
Incidentally didn’t that cost too much before it started going?
PH: No, I don’t believe it did. I think that the movement was scared of investing, investing in a credit union centre. They didn’t believe that we would be able to finance it. I have always contended, even with Peat Marwick’s doing the reports and everything else, that it was the one thing that would have worked for the industry and given it a support and stability. We need two point three million dollars more and we could have had it up and running and working inside fifteen months from 1976. But we talk too long in this industry instead of getting out and doing things. Other things they wanted to go in to.
Well I will need you to let me have one of those. Now is there anything else you think we should discuss?
PH: Don’t know. Just the growth of the industry. I am not sure where it is heading to at the moment. It is being contracted. Big is supposed to be beautiful, but not necessarily better in my view point. Some societies should be allowed to stay as they are. All right maybe some others might want to amalgamate, but it shouldn’t be forced upon them. It should be up to the members to decide what they want to do. Although, I think in this day and age the loss of the Warburton type Schools that we had, you have lost the camaraderie of people being involved. Maybe I am out of touch with it, but I think there is less involvement of the grass roots Directors and mixing and mingling. It has gone to the professionalism and more people are interested in their job than interested in the co-operative philosophy. I think that the co-operative philsophy espoused by Raiffeisen and the others in the early days we put them into practice. But now it has gone to a commercial money making enterprise where if you do it right your salary gets bigger and better and your retirement package looks even more healthy. But whether your credit union supports the ideals it started out with, which was to pool the savings of people joining together for their own mutual benefit, that goes out the window. Now people just want to lend, lend, lend. I got a letter from the Reserve Board the other day on our society saying you have got to keep pushing loans out. I said, ‘But if we push loans out, we can have a bad loan. The fact that the money market has dropped and we have got excess money that we can’t lend, it is returning us less than what we are paying, but at least our loss rate is less than it would be on a loan.’ Now they can’t see that. I say, ‘Well why should I put it out at a higher rate and have it go bad, rather than take a one per cent loss at the moment whilst the economy turns round.’ People only put their savings away to keep them for a rainy day because they can’t afford to borrow. We will support them, we’ve got reserves. This is what it is all about if you have got the reserves. Some credit unions should make bad loans on some occasions just to help some people out. You are always going to have a bad loan. But you are not in the business of just lending money with no basis for repayment. I think some of the credit unions have gone overboard on this basis of trying to get big and they will do anything to lend money, but they don’t look at their margins properly and they don’t cut their cloth. They want to go into too many things, they want to get in too big a building. They don’t look at the opportunity costs of owning a building or not owning a building. Sometimes it is much cheaper to pay rent than it is to put your money up into the bricks and mortar. It might look safe and secure, but your cost to hold that money is enormous. That includes buying EDP facilities. You spend a quarter of a million dollars on it. Even at ten per cent that is twenty-five thousand dollars a year you don’t have coming in as income.
I notice there haven’t been so many co-operative ventures in EDP in Victoria as there have in New South Wales.
PH: I think because we have a lesser number of societies. Some of them went and did their own thing on data processing. Others were too small. Others of the size of SEC, and Post-Tel had to jump quickly and do their own thing. I don’t know what the status is of FCS now as to how much of the industry it covers, but I would imagine that these days the majority of the credit unions of reasonable sizes now would have had to go to data processing and would have basically had to have taken the FCS system just to survive, because they develop their software on their own.
Yes I don’t think many of them have gone out of that. Nearly all are in FCS. But I am talking about the hardware. There they seem to have individual hardware.
PH: Yes there is no standardisation in hardware, as I understand it, in the industry. Everyone says, whoever is giving the best deal or the best commission kick-back, maybe, in inverted commas, they will take that. But I don’t think anybody has addressed the compatibility of the hardware. Some people make recommendations. Even FCS recommends one thing. Now whether it gets a benefit from the suppliers because they are making the recommendations which aren’t passed on to the users or not I don’t know.
I don’t know either. But we were up at AICUM this weekend and there were a terrific amount of computer people. In fact I would say the majority of the stands were computer people.
PH: This is where no matter where you go today, every one is in computers and everyone is trying to flog hardware and everyone is trying to flog software. But if you have got your software system locked up, well then you have got to look at a machine that has the capacity. The FCS, being a very large integrated system, takes up a lot of capacity within your system so you have got to watch that. It means you have got to keep buying bigger and better equipment just to support a lot of programs that you may not need but are in the package and therefore you buy it as is, where is.
Well that is maybe the reason why as I said there are number of New South Wales credit unions who are in co-operatively, so they don’t own their computer, six or seven of them have clubbed together in one.
PH: Well you have got more societies up there and it depends on how they are spread out and how they get on with each other. It seems from which I have seen over the years down here if you try to have a co-operative venture it looks as if you are trying to take over the other society and everyone gets their back up and no-one wants to do anything.
Well is there anything now that we haven’t covered that we should?
PH: AFCUL was a good three and a half years. AFCUL has done some good things. Just the mode in which they go about things on occasions, but I am now talking from hindsight and from seven or eight years down the track. I haven’t really kept up with what AFCUL is doing or has done or will do.
What about the time when Kevin Murray was Executive Officer after Dermot?
PH: Well Kevin was Dermot’s offsider so I don’t think basically anything changed for a while. I am just trying to think who was the ultimate replacement for AFCUL. Peter Timmins, that’s right. I wasn’t in it then, that was after the event. That is when they started to get AFCUL back on what I would call a proper footing as a Federal representative organisation of credit unions. I think at that stage all the States had tantamount to getting their acts together at getting competent Managers and getting a better operation within their own Associations that could be represented at Federal level. Where they could work together and have Managers’ meetings between the States. Because until you had that you didn’t even have cohesion at the State level between the Managers, so how are you going to get between the Directors at a Federal level. That was always a problem. The other thing that has always amazed me is that you take every one away on all these charter tours and trips and you put the alleged best brains of the credit union movement on one plane and you don’t insure it. That often worries me, because if it goes down you take all your knowledge. Whereas in most corporations your Chairman and Directors and Chief Executive Officer never travel together, or shouldn’t. But here in the credit union movement we lump them altogether and they all travel as one to keep the costs down. That is something that sometime they have got to address themselves to. It happens in industry that you keep personnel who can’t be together in the same car or in the same plane, because if your 2IC and OIC travel together and something untoward happens you have nothing.
I reckon the people in charge, who are really in charge, are down much further down the chain.
PH: Well that is possible too. No AFCUL is one thing. The VCCA well I am going to be sorry to see, if what I understand is right, it go out of existence because of Federal legislation coming up.
It is the industry doing it not the Government. You haven’t been involved in all that, have seen anything about Project Renewal?
PH: No.
Oh, my goodness.
PH: We talk a lot about it on paper and we have meetings and we send reams of paper out, but I have no idea what that is about. I saw Project Renewal and thought it was something to do with Catholic Church during Lent.
Well they have been planning it for quite a number of years now, and it is finally coming to fruition. They have been challenged by a number of credit unions in the courts and they are gradually working their way through that. Whenever anything comes up for election in one of the other organisations they give it to Richard Crosbie, so that way they circumvent the challenges. It still can’t go out of existence, so they make him Chairman. He is Chairman of the ACT League, the Tasmanian League, he will be Chairman of the New South Wales on shortly. They will gradually all be one.
PH: I don’t know whether co-operative federalism is one thing.
A Board of nine and a Council of forty.
PH: Oh God help us. Well they will never get a decision made out of a Council of forty then. But you only need committees of one, because if you come up with the wrong decision you sack the committee, it is much easier. You can’t use the excuse, ‘Well I’m sorry I couldn’t get the rest of them together for a meeting.’
The service organisation is called CUSCAL, Credit Union Service Corporation of Australia Limited. That is all the VCCA, the services, New South Wales. Queensland is still not in at all. A number of other associations have been registered, one in Victoria and one in New South Wales, you know they are not going to be in it.
PH: We keep re-inventing the wheel that is a part of our problem. That is how I see it, we keep expending money on all these things. It was like the Guarantee Fund and Reserve Board, the other day in their letter, I see that they call it a ‘CAMEL Rating’ on Capital Adequacy Management Evaluation and Loans, or something or other. I looked at it and said, ‘Yes, but a camel is a horse designed by committee. So I assume that their CAMEL Rating ain’t going to work in the long term.’
That is a good place to end I think. Thank you very much Mr Peter Hodgkinson.
End Tape 2A: 4870 Words: 1 hour 50 minutes.