14 FEBRUARY 1992: VCCA19: RICHARD RAXWORTHY TALKING TO PHYLIP DOUGHTY
I will ask you Mr Doughty, where were you born and when?
PD: Born in Western Australia in 1950.
You grew up in Western Australia?
PD: Yes I did.
Whereabouts in Western Australia?
PD: In Perth, all around the city. The suburbs of Perth.
What sort of influence did you get from your parents? What did your father do?
PD: Father was a shipwright. The only influence I got from him was that I learnt if you are going to get anything in this world you have to work hard for it.
Your mother, any special from her?
PD: Compassion. One of seven children in the family. My parent’s ancestry is a combination of English and Irish, my father was of Irish ancestry. All our families were big.
Was there any religious influence?
PD: Yes. I was a very active member of the Catholic Church up until my late teens.
Where did you go to school?
PD: I went to a number of government schools. Primary education, I finished at Hilton Park Primary School. Secondary education at Hamilton Hill High School. Tertiary education at the Western Australian Institute of Technology, which is now Curtin University.
Did you go straight to university?
PD: No. I left school when I was fifteen. I wanted to go on to tertiary education, certainly I had the academic performance to do so, but being the oldest son in a large family I needed to go to work immediately I was able to, to contribute to the well-being of the family. So I continued studies at night school. Had a two year break, went to night school, effectively got entrance into university and commenced my university studies in 1972 on a part-time basis. I completed my degree part-time.
What were you working at all that time?
PD: Well I started work when I first left school in a wool broking business as a clerk. Then I commenced part-time studies and had an interest in accountancy so I think in 1967 or 1968 I joined a Public Accounting firm. I worked there as an accountant, taxation, and auditor. Then I moved to a building society in 1973 as Internal Auditor.
Where did you first hear about credit unions?
PD: In Western Australia when I worked for the building society. Credit unions started to develop with the strong promotion of the Western Australian Teachers Credit Society, Western Australia, that was when I really realised they existed. Had no idea before then.
Did you go to any credit union Schools or join a Chapter?
PD: Nothing. I didn’t know anything about credit unions. The only activity I had with credit unions was when I actually started to work for one in 1984.
How did that happen?
PD: Well the organisation I worked for was growing very rapidly, very successfully. I was on the pathway for rapid promotion and had been promoted to a very senior level. The organisation, which was Perth Building Society, was in the process of becoming a bank and to train its staff up to cope with that we went into exchange programs with overseas financial institutions. I was the first person in our organisation to be involved. I had a choice of either going to the United Kingdom for a year or the Republic of South Africa. I chose South Africa. I spent some time there, over 1982, 1983, very successfully. When I returned I decided my career aspirations lay in actually in Chief Executive Officer areas. That was an unlikely prospect for me in a big organisation employing many thousands of people, where the current leadership of that organisation meant that it would be unlikely that I would get to that level in the time frame I wanted. So I started looking for another job and I applied for and successfully got the position of Chief Executive Officer for the Education Credit Union.
What size credit union were they then?
PD: $50 million dollars.
Quite a lot of money, but how many members did they have can you remember?
PD: Yes, roughly, nineteen thousand.
Has that changed greatly.
PD: Yes they are now $100 million, membership is 26,000. Penetration in the teacher market has increased dramatically from the 70 per cent to nearly 90 per cent. The strength of the organisation has changed dramatically. When I joined I was hired, primarily, because the organisation was in fairly serious trouble. Profitability was very low. Administrative controls were non-existent. Major staff discontent, major member discontent. They really needed a team of people that could take it over, take over the management and inject new technologies and new ideas and tight controls. That was why I was hired.
Do you remember what sort of Board, what sort of selection panel you went in front of?
PD: Yes. The entire Board.
Alan Parry?
PD: He was the Chairman of the Board. But the selection panel was the entire Board. I had to meet with the entire Board and was subjected to several hours of questioning. Quite frankly at the time of this they told me they were, by professional standards, rank amateurs. That interview worried me the most about what I was getting into.
But they accepted you and you accepted them.
PD: Yes. Except that at the time all these problems I spoke about had got to a serious level with the credit union. There was a major revolt against the leadership in the form of an attempt to de-seat a number of Directors. When I joined it was in the middle of a campaign by the two teacher unions that represented the majority of our members, to remove a number of Directors at that Director election and they were successful. I joined a Board that was very much in conflict between themselves and it was an extremely difficult time.
Can you remember who was who? Who was being ousted?
PD: Yes. The two Directors that were ousted at the time were Geoffrey Thomas and Bob Higgs. The two appointed were Peter Crocker and Peter Ford. Crocker was then the President of one of the unions, the TTUV and Ford was the Assistant Secretary of the VFTA.
There have been a number of teacher credit unions in the States. Do you know much about the relationship between the various teacher credit unions?
PD: Yes I do. Then or now?
Well then as opposed to now.
PD: Then I suppose there were three major teacher credit unions. The VTU was the biggest, Ed Credit was the second biggest, then there was a tertiary credit union primarily representing people employed in the university sector, that was called Tertiary Credit Union. There were other university-based credit unions and there was one very small teacher credit union. At the time the market was dominated by the VTU, in the sense that they were the biggest and the best run and had the most reserves. Ed Credit had grown very rapidly but was extremely weak, low reserves. The Tertiary wasn’t much better, weak and low reserves. Since then the VTU is still the biggest, by far, it has got nearly twice the assets of Ed Credit. But the relative financial strength of the two organisations has changed dramatically to the extent where Ed Credit now is, in a capitalisation sense, certainly the strongest credit union of the teacher group. It is the second strongest credit union in the State of the over $50 million credit unions. It has for the last five years ranked in the top ten best performing credit unions in Australia, whereas the VTU hasn’t ranked at all.
Do you know the divisions in the various credit unions, did they come about from the divisions in the unions? Primary and Secondary and such like and the Communists and the DLP?
PD: Yes, they have all had them unfortunately. There was major plays politically and the Primary Unions weren’t very close to the Secondary Unions. That definitely influenced the formation of Ed Credit, which was before my time, but most of my Board at the time were very much involved with the union, the VFTA and TTUV. I think that the creation of Ed Credit reflected the union politics at the time. Since then of course the unions have gone some of the way of getting together, but it appears that the void between Ed Credit and VTU is about as wide as it has ever been I would imagine. It is as wide now as it was at the time that Ed Credit was formed.
I didn’t know anything about that until last night actually. I was interviewing Wendy Lowenstein and she was a Communist and a teacher and she told me all about the union rivalry from her point of view.
PD: Oh it was massive. But as I said, it is less so there although there is still some rivalry between the union, the VFTA, and now the new Primary and Technical and TAFE Union, the FTUV. I would say ultimately they will have to merge. I would say ultimately the two big teachers’ credit unions in Australia, in Victoria, would merge, but Board politics and peoples pride and perceptions probably prevents it.
You don’t think it is getting any better?
PD: No it is definitely getting worse because aside from the business ramifications, the industry interests of the two big teachers’ credit unions have changed dramatically. Ed Credit is a very strong supporter of the National Association, AFCUL, and the State Association, the VCCA. The VTU has disaffiliated from those organisations, has been instrumental in setting up a rival State association and a rival national association, even though they are both very, very small. This reflects the basis views of their Board of Directors versus our Board of Directors. We are very much for co-operation. We are prepared to live with the decisions we can’t win and be happy with the ones that we are part of winning. That is we run with the majority decision. The VTU takes a pretty secular view, probably for very good reasons as far as they are concerned I can’t see it. No, I think we are further apart than we have ever been.
Well what was your first contact and actual office with the VCCA? On a Committee first, or what?
PD: I don’t remember that far back.
How far back was it?
PD: Well I came on to the Board in 1987. Before that the Chief Executive Officer, then David Dinning, operated a Management Advisory Committee which I attended frequently. It was where a group of most of the active credit unions in the Association would meet periodically at the VCCA and be briefed by David and share views about where we were. I suppose then I started to build up an interest in the VCCA. When I first came to Ed Credit, when I looked at the VCCA it was an organisation in trouble. I was extremely concerned about our affiliation with it. I was extremely concerned about the amount of money we had with it. In the early years of my time at Ed Credit, I kept our relationship with the VCCA to the minimum required as an affiliate of the Association. I kept the minimum liquidity, I didn’t use virtually any of their services and I was extremely concerned about the professionalism of the office. However, I found out that they were coming out of a serious problem themselves. They had had a massive problem in direction and misadventure in financial terms. David Dinning had been working hard to correct that and rebuild unity, because of the fracturing of the movement it was ultimate decisions made by a Board of elected representatives of the movement, but all the blame was put on that Board. So there was some pretty heavy politics in those days related to the VCCA. All I knew it was an organisation that didn’t look too good and I wasn’t having to much to do with it. But over time I came to understand more of the ethos of the movement. Bear in mind when I joined the movement I came from a very hard financial background where you made money. The credit union philosophy was very different and it took me some time to come to grips with that. Gradually I came to understand what the VCCA was trying to achieve and I think I started to work hard to help it achieve that. Ultimately that led me to joining the Board and that I did in 1987.
How early were you in? Did you see anything of the problems, the Jubilee Lake problem for instance?
PD: No I came in after that had occurred, but the problems existed. The VCCA had a huge deficit. Lot of turmoil, lot of mistrust, lot of concern. So that was all in the early years, 1984, 1985, 1986 when I came here. Quite frankly at the time, other than the fact that I had made the decision that the VCCA should be left alone as far as Ed Credit’s money was concerned. I had my own problems with Ed Credit, as I mentioned to you earlier. Ed Credit was in fairly serious difficulties. We had a further challenge to the Board the following year, 1985, and again a union-based challenge. Again it was successful. Another Director was removed and another union-appointee was put on to the Board. So at first while I was there I put all my energies into the credit union and didn’t worry about the Association at all.
What about the computerisation of things, had it all been put through the bureau in VCCA?
PD: No Ed Credit was operating its own computer, and still does. When I joined that was one of the major issues. The Board had made a decision to buy a computer system, on advice from a major accounting firm, which in retrospect was a monumental error. My energies and the energies of the small team of people I had that were brought in, people like Eddie San Felipo, who is now General Manager of CFRI Credit Union, Barry Butchard, who is still an employee of Ed Credit, these people were there to apply their commercial expertise to getting us out of this problem. They did that successfully and it wasn’t until we were out of that we were able to put our minds to other things, that was about 1986.
What was the hardware that they had purchased and what software were they using?
PD: Well the hardware was all right. They brought a computer called a Sequel, made by Macdonald Douglas, sold in Australia by AWA. But unfortunately they sought to pioneer a new software system in Victoria, in Australia, that was called PROSY. By the time we got it working it had cost us so much money and we had seen the future ahead that we decided that we had to get out of it. We did, we moved to FCS and haven’t looked back.
Do you know anything about the antecedents of that FCS. Even people like Ken Miller haven’t been able to explain it exactly from the software point of view. They have explained the politics of how it came through. Was it developed in Western Australia?
PD: Yes it was. It was developed in Western Australia by a group of technicians from Western Australia who are now the proprietors of GCS and another company in America called Ultradata. It was written and developed in Western Australia and gradually marketed all over Australia.
Were you aware of the marketing in Victoria?
PD: No. By the time I arrived in the movement, basically everybody was using FCS.
It was marketed in Victoria before it was marketed in New South Wales.
PD: That’s right.
Yet that doesn’t seem to be recognised.
PD: That’s right. The first credit union outside of Western Australia to use FCS was Police Credit Union in Victoria.
Yes, a fascinating story.
PD: I know something about it, because one of the odd things that happened was that I joined the Board of FCS in I think 1986, or early 1987. So I was on the Board of FCS before I was on the Board of the VCCA.
Well let’s cover that period then, if you like. You must have come across Ken Miller in that case.
PD: Of course, he was the Chairman of the Board of FCS. He was also a General Manager of New South Wales Teachers Credit Union. He was a person I had a bit to do with because the teachers’ credit unions have an association. They meet annually, they exchange ideas. Ken was one of the first people in the industry I got to know pretty well. John McKay of the VTU is now deceased. Lloyd Hawkins, Queensland Teachers, is now retired. Brian Frew of SATISFACT, who was dismissed effectively from SATISFACT, and a chap from Tassie Teachers who I can’t remember, who also was dismissed, I can’t remember his name.
What were the problems at FCS while you were there, or was it all on the up and up by that time?
PD: No. It was never on the up and up. It had a multitude of problems. Organisationally there were difficulties. Lack of management leadership. They were caught up in some of the State political rivalries. They weren’t being run really as a commercial company, they were being operated as sort of a tool of the co-operative movement. Yet it was a company that employed a hundred people and had substantial investments. It had some budgeting problems because it undercharged for its products. We had several changes of leadership and General Managers. In fact the first FCS meeting I went to we dismissed the then General Manager.
What for?
PD: Incompetence. He presented a budget that didn’t balance. I joined and because as a new Director I spent a lot of time catching up with things. The reality was I went through the budget documents and it didn’t work out. When I went to the meeting I raised all this. Others had come to the same conclusion and because of other events that had occurred relating to the General Manager at the time, it was decided that it was the profit of the company and the fact that the budgets didn’t add up and didn’t mean anything to the Board that was enough for him to be removed. He was removed at the first meeting I went to.
Were the people who were the originators of GCS and FCS itself still involved in the business at that stage?
PD: No, not at all.
They had already gone out?
PD: Long gone.
So if there was a battle in there was it between the States or was it only about the administration of the company?
PD: My perception of FCS at the time I joined was that there were secular interests, particularly from New South Wales, particularly from one individual from New South Wales.
Who was that?
PD: Ian Harper, who was the Association General Manager. He had a particular view relating to FCS which some of us didn’t agree with. As it happened he was also dismissed from his job. I know the reasons why, but I don’t know what the legal position is so I won’t say. He left and after he left and was replaced on the FCS Board I felt that the Board worked together as a group extremely well. That is when I think things started to happen in FCS.
Was Reg Elliott taking much of interest at that time?
PD: Off and on, yes. But I think Reg then, and now probably, was spread far too far. I think Reg sort of saw FCS as almost a subsidiary of AFCUL and the Board and not independent. I think that was good because the ??? started with the Board rather than a Management Committee and recognised it had to duly respond to all customers. This became particularly important when the industry started to fracture and non-affiliates of AFCUL were concerned about the reliability of the supply of their principal software system, FCS. So the Board had to be seen to be acting in the interests of all of its customers, even though it was wholly owned by the affiliated movement only. So questions of pricing came up and we basically agreed that we had to price the product effectively at a true market rate and that any profitability made by the company would be returned to the Associations which in fact had made the investment of the capital. So everybody paid the same price, but the surpluses made went back to the people who had put the capital up to make it happen. That is what I tried to aim for, what the Board tired to aim for, but it took a while because the pricing mixes of FCS for so long had built around the fact that FCS was run as almost a non-profit organisation.
What was the relation of FCS to EFTS?
PD: Pretty appalling. Ausnet.
Also the terminals in the first instance.
PD: Yes. I think they were pretty appalling. I think it was a bit like when I joined the VCCA, I had certain views about the VCCA. When I joined FCS and started to find out something about EFTEL, I had the same views about EFTEL. Extremely concerned about their quality of management, the erratic behaviour of one of the supposed leaders of the company. The huge costs of running the company. That is one of the reasons why Ed Credit did not participate and has not participated in the national plastic card product.
Did they participate in the CUE card that was actually started in Victoria?
PD: No. Ed Credit has never been in it. When I joined Ed Credit was using Redicard and one of the first things the management team at Ed Credit did was dump Redicard. Extremely expensive.
What did you go to the State Bank?
PD: No we went to the National Bank. We are the only customer of the National Bank. Sorry, there are two credit unions, ourselves and one small one, but principally it is our product.
Some of the hold-outs went through Visa into the system.
PD: We didn’t.
I mean they used that to go into the rest of the banking system, through Visa. There is a few of them doing that anyway.
PD: Yes, there is.
They never considered that?
PD: No we looked at Visa. We actually paid the fee to join it, but again when the team we had priced the product up, the product was exceptionally expensive. At the time Ed Credit couldn’t afford it and so we declined to participate. We forfeited the money that we had paid up to that date.
When you went in with the National Australia Bank on the cards, now of course the whole movement, Redicard is in with National Bank and ANZ aren’t they? You can access their machines anyway.
PD: Yes I think you can. We don’t use Redicard so I don’t really know a lot about it.
You can, I’ve got one. I mean I am not active in the politics of the movement but I am a member of Sydney Credit Union.
PD: We will revisit Redicard and Visa card, because we have got a contract with the National Bank that expires in eighteen months time. All I can say is that we will look very hard at Visa and Redicard and if we think they are products that we can use and they are relatively cost-effective then we will adopt them, because we want to support the movement. Seven years ago, when we looked at these products, we worked out some figures that proved to be absolutely accurate. A very large number of Victorian credit unions also withdrew from Redicard and Visa card because of the high cost. Fortunately the industry has persevered and it has persevered to create an alternative and I respect the industry for that and I guess I have got to make a contribution. But at the time it was a product that was too raw, too under-researched and launched inappropriately and unbelievably huge costs to the movement.
The ones that went in with the State Bank at that time, since that has gone in with the Commonwealth, owned by the Commonwealth in Victoria, they have got access to the Westpac, well they will have very shortly, and the Commonwealth.
PD: Again I don’t know much about the State Bank products. I do know that when we looked at National Bank we looked at the State Bank and the State Bank product was extremely well-priced and the credit unions that had gone into it had done very well compared to Redicard users. They must have saved hundreds of thousands of dollars a year. However, I know that the Commonwealth Bank has increased the pricing very substantially. I think the price differential between Redicard and State Bank card now is non-existent.
Did you know anything about Lloyd Hawkins’ efforts back in 1977 when he first introduced the off-line ATMs, also went into the plastic card?
PD: Yes. Well he pioneered it. Again at huge cost to his credit union. Fortunately that one worked. Lloyd tried a couple of pioneering efforts and that one worked but the next big one he tried didn’t.
What Expo?
PD: Yes, Expo.
Everybody said it was great, but it was a big money loser.
PD: I don’t know that it was great, but he must have lost, Queensland Teachers must have lost $4 million, $5 million, staggering amount of money. Staggering amount of money.
I interviewed him up in Queensland a little while ago. He was still quite proud of it.
PD: Well in a pioneering sense I suppose he could be. Because what he did was unique, it was a first. But it was just something really that for a credit union of their size they couldn’t afford. They afforded it, but at huge cost to the members. Not only have they lost the money, they have lost the earnings of that money. So the on-going cost is if you lose $3 or $4 million at 15 per cent, you are talking about $450,000 to $500,000 lost revenue, for ever. So the cost is just frightening. Lloyd sees it as a statement being made by the movement and maybe that is the visionary zeal that Lloyd’s got. I see it as something that his Board endorsed, if it had of come off he would have been the hero of the movement. It didn’t come off and it nearly sunk the credit union. I think the risk was unbelievably big for them to take.
Now we started on the business of EFTS and EFTEL as it came through. Were you involved at all in the planning of the switching system?
PD: None. We don’t use the system.
Well FCS must have had something to do with it, mustn’t it?
PD: FCS provided some of the connecting. That was always a problem for us and we had to talk to IBM and so on about it. But really we didn’t do much and it was primarily with EFTEL.
End Tape 1A: 4578 Words: 1 hour 50 minutes.
I suppose we had better turn to the VCCA Board and your coming on to it. How did that happen?
PD: I was invited on to the Board and very much encouraged to join the Board because things weren’t going particularly well. They weren’t proceeding to go well financially, profitability was low. The Board was dominated at the time by Directors and they wanted to get some hard-nosed men in on there and I have got a bit of a reputation, I suppose, of being pretty hard-nosed. So I nominated and stood and was elected and effectively I was elected at the cost of Alan Dash, the VTU Director. I think there is no doubt when Alan lost his Board seat on the VCCA that the rot set with the VTU-VCCA relationship. There were lots of other reasons, but that certainly would have been one of the last straws that moved to drive the VTU away. I joined the Board and there was no doubt that unity was a question and financial performance was a question. I think it is fair to say I put most of my energies in assisting in the improvement of the financial performance of the Association.
Was there a factionalism in the Board when you arrived?
PD: I think so, yes, definitely yes. There was factionalism and it took long time to remove that. But there were other changes on the Board and then we moved to the structure of the Councils, State Association Council, the Business Council and the Board I think the factionalism was dead then, absolutely dead.
How was the factionalism? Who were the people on the various sides and what sides were they?
PD: Well I guess there was an industrial group. There was a country credit union and community credit union group and there was a bit of the old guard.
What the Catholic parish credit unions? They were the community ones.
PD: Yes they were the community ones I think. The old guard, I mean Richard was old guard, Wally Winter was old guard, Roger Bell was old guard I suppose. Very much particular views and people still living with the problems of the past. A lot of change had to happen here and one of the views that I started to form after a short while here was that the General Manager David Dinning who was doing I thought an outstanding job in the healing process and the human representation side process. That is getting to people, getting to credit unions, smoothing ruffled feathers and so on. They didn’t appear to have the Schools, maybe they didn’t have the time to address the hard-nosed financial questions. People were extremely concerned about the cost of the running the VCCA. The affiliation fees were very high, the highest in Australia. We were going through the process of starting to lose affiliates which put a greater burden on other credit unions. Something had to be done to address the costs and we had various budget meetings and so on, but things just didn’t happen. I think David tried to employ some people to make it happen but that didn’t quite work out either. In the end, because I don’t think there it was in his area of skill, there wasn’t the necessary leadership shown and things just weren’t happening. So it was a relatively short while after I joined that the Board was fast coming to the conclusion that David wasn’t the man for the job given the way we were going. Approaches were started to replace him and I was really part of that process.
Who else?
PD: Well I was on the Executive of the Board. The process was the Chairman, the Deputy Chairman and the Executive Member, and I was the Executive Member.
How often did you meet, or was it informal?
PD: I had a comprehensive file on it which I handed over to Richard Crosbie when he became Chairman in 1991. I think the process was very formal. Once it was basically agreed change had to happen, I think it came after the last budget David delivered before we changed the management.
Was he told straight away or was he left to flounder a bit. He felt he was losing support and that he didn’t get sufficient support.
PD: I think that is right. He was under immense pressure at Board meetings. The questions being asked about the financial reports and the budgets and the compilation of the data, errors in the data, put him on the spot. He had to draw on his management support. That was not necessarily unreasonable except that because the emphasis of the Board was to get things fixed up financially I guess he just had to find more time to do it. I just don’t think he had the ability in that regard. So what started to happen was a bit of a rot set in with David. People kept asking questions and he wasn’t giving the answers that people wanted to hear, I suppose, and things weren’t happening. Well I don’t know what ?????? to adopt. All that happened was that more pressure was put on him, he didn’t deliver, confidence was lost and a rot set in. I think he would have perceived that he didn’t have the support of the Board, he certainly would have perceived it as a fault of the Chairman. He would have seen there were some Directors very antagonistic towards him, not personally but certainly professionally. I would have imagined he would have seen me as one of them, because that was my area. That was hard for me because I liked David and at the time I was very mindful of the enormous job he had done to rebuild the Association out of what the ashes of Jubilee Lake. But nevertheless we had to go on and I guess I was very hard on it because of my own background. I had moved into an organisation where the previous Chief Executive Officer of the organisation still worked for the organisation and she’d been woefully over promoted, was an excellent employee, but just over-promoted. An organisation where the Board was weak and incompetent. Having that so fresh in my mind, and I was still fighting that when I joined here. It was very apparent to me what changes had to happen both within in the Board and after a while the management. So I was instrumental in bringing that about, I worked very hard to bring that about.
So the appointment of the next Manager, he was actually a Board member.
PD: Yes. We decided David had to go. A decision was made and negotiations took place with David, of which I was a part. Then David left us and then we started to hunt for a replacement for him. We advertised, we used a Management Consulting Group, body brokers I call them. I must say I was quite surprised, I was still on the Executive, when the Management Consulting Group came to us with a short-list I think of three of four and one of the short-listed applicants was in fact a Director, Bill Meares. So it was virtually a review process. We discussed the four on the short-list and got down to two of quite different backgrounds. In the end the overwhelming factor in support of Bill was his association with the credit union industry and a credit union per se. His background in hard commercial realism. Whilst he lacked formal qualifications he was obviously an intelligent, capable person and so Bill was appointed. His job was to get things tight, get things fixed up. He was recruited and that is what he did. Certainly he put all his efforts into doing the financial part up front, but in the opposite way to David. David was long on diplomatic skills and short on financial skills. Bill was the exact opposite. Bill was very long on financial skills and I reckon he had even less diplomatic skills than David had financial skills. It was vital that we had everything fixed up financially. We were well and truly into the fractured mode in the VCCA. Credit unions had left and bloody fights and Moe was happening and Bill just didn’t seem to be able to do it. He had great confidence in himself. He didn’t suffer fools very gladly and could be quite aggressive. Really he was hired basically to do a job, and he had done the job and it was time to change. He was very much a part of initiating that. The only problem with Bill was really what it was going to cost for him to go. We had a bit of a problem like that with David. When people leave, unless they have committed a mortal sin you have got to accept the fact that for most of the time we had to look after them. They were going into a world of uncertainly and they need something to help them along the way. It is just a matter of deciding what the quantum is. Always the employer will think it is less than what the employee thinks. I went through this with two FCS General Managers and I went through it with two VCCA General Managers. In the end I think it was settled, even though there is always tension. In fact I think there was more tension with Bill than there was with David. The matter was resolved successfully and whenever I see David now I greet him as a friend, which I think that he is, certainly a chap who I think has done wonderful things for the movement. I have never seen Bill Meares after and I don’t know what Bill is doing. But I think we parted on a professional basis. Then I was instrumental in the engagement of Nichols.
Where did he come from?
PD: He came from the Hindmarsh-Adelaide Building Society Group in South Australia. Prior to that he was the General Manager of the South Australian Credit Union Association. His recruitment was principally done by AFCUL but as he was being employed by the VCCA we had to agree to it. I was Chairman at the time and went through that process and his appointment was finally carried out. Certainly in the ten months that I worked with Rob on Chairman-General Manager basis I think he displayed outstanding qualities and he had to work in a very hard environment. He was in an environment where diplomatic skills were needed. The fact is the financial system is now pretty much in place, although Rob has been able to cut costs even further. I think the Association is going as well as it has ever gone. Probably running now better than it has ever run in its history, other than in the days when it was small and catering for a lot of very small co-operative credit unions.
What about the World Council meeting in Melbourne, were you involved much with that? You were on the Board at the time.
PD: Yes I was on the Board.
When were the decisions taken to get that? I suppose you weren’t around when they actually got the meeting there.
PD: No I wasn’t. That was done with a lot of negotiation by David Dinning and David was instrumental in bringing the whole thing about. But certainly the ????????? concerned me greatly as a member of the Board. It concerned me even more, because Alan Parry my credit union Chairman was made the de facto Manager of it for one year. Because there was no remuneration involved and no support involved it put a big strain on my credit union. We had to provide secretarial expense support, we had to provide him with a car because he had so much running around. It was a very, very big event for Australia and I have got to say, despite some serious problems we had particularly with some of the VCCA Directors, it went off extremely well. I think it is a tremendous reflection on David and on Alan Parry and on a lot of other people who put so much into it.
Did you have any actual part in it?
PD: No.
Richard Crosbie?
PD: Oh yes, Richard had some part. It appeared to me though that all the real work and nutting out was being done principally by Alan Parry and David Dinning, with other Directors on the periphery. Some tried to do more. I mean one person that would claim tremendous involvement and contribution was Roger Bell. I know he tried to do a lot, but he also created huge problems because of his personal style. But nevertheless he did create a lot, he got a bit of money in and he made a contribution.
Did it cost the VCCA much to put it on?
PD: In a time sense it did yes. In actual dollars I don’t think so. In actual cheques being written I mean. But if you looked at the resources committed for which no charge was made, then yes it cost a few bob and was worth every cent. We hosted an international event, probably the best that has ever been held. I have heard nobody, including all the people I have met overseas, who have told me anything different other than that the Australian one was the best ever held.
That is very good. Was Ken Miller involved at that time?
PD: Oh Ken was on the periphery of it. Reg Elliott. I mean officially it was an AFCUL Conference. Bill Howe was President of World Council, I think, at the time. So everybody was involved, but from my end the people really doing the work were Alan Parry and David Dinning.
Was there anything we should add to that about the World Council or is that about it?
PD: I think that is about it. I think it was tremendous achievement to get it into Australia and get it to Victoria. I think a lot of people did a lot of work. Many credit unions contributed staff and offered the Council resources, so I am not underwriting anybody’s contribution at all, but there were a couple of principal players.
Right. Now your involvement on the Board of the VCCA. How did it come about that you became Chairman? Whose idea was it that you stand against Richard Crosbie? Or did you stand against him?
PD: Well no I didn’t stand against him. What happened was that there had certainly been some disquiet about Richard’s performance as Chairman. It was particularly related to the fact that there had been continuing argument over the feedback from AFCUL. People thought that Richard just didn’t do the job and I have to say I didn’t think he did it either. There were other problems about the Chairmanship and there was a lot of discussion about there being a need for a change. However, as it happened on the day of the meeting after the General Meeting at which we elect Office Bearers, another Director, Roger Bell, nominated himself as Chairman. I think he was nominated as Chairman. It was apparent that a number of people were most reluctant to have Roger as Chairman, and this was when Bill was General Manager. Consequently no other nominations came forward. No-one nominated Richard. Hang on, did someone nominate Richard, Richard might have been nominated. Roger Bell was then nominated. There was a lot of discussion about Richard not being the Chairman and then one of the my colleagues nominated me.
At whose instigation?
PD: At his. It was what you could call spur of the moment I suppose.
Was that Maurice Seaview?
PD: No I replaced Maurice on the Board, Maurice was gone. No Bernie Hawkins nominated me. I had been previously approached to stand for Chairman and declined. I said it would take too much time. I felt there were others on the Board who could do the job. But when Roger nominated then someone felt that we had to put someone up against him, so I was nominated. Hang on Richard hadn’t been nominated. Roger was nominated, then I was nominated and then Gavin Cook nominated Richard Crosbie. So there was a ballot and I won the ballot. I got exactly half the votes. I got four votes and the other two candidates got two votes each. I was declared Chairman. Then Gavin Cook was nominated and elected Deputy Chairman. Roger Bell was also nominated as Deputy Chairman and lost the vote. Then Richard Crosbie was the only nominee for Member of the Executive of the Board. So the previous Executive which comprised Richard as Chairman, Gavin as Deputy Chairman and me as Executive. Hang on Gavin Cook was Chairman for a while, was that before or after. That’s crazy it is all wrong.
You have worked out that it is inaccurate, and in fact this is two separate intervals that you have telescoped into one, so to speak. So let’s try it again.
PD: The Chairman at the final was Gavin Cook, so I will go back one. The previous dissatisfaction with Richard had resulted in Gavin Cook being nominated as Chairman and elected Chairman. Richard retained Deputy-Chairmanship and I was the Member of the Executive. Now over the period that Gavin was Chairman, he had previously indicated that he didn’t want to stand as Chairman and there was concern about the fact that he had developed a very close relationship with Bill Meares. So on the day of the General Meeting there was a nomination against Gavin by Roger Bell and everything else I said occurred. So I won. I took the view at the time that Project Renewal implementation was on us and I accepted the nomination on the basis I thought I would be there for one year and that hopefully by then the Project Renewal process would have occurred, implementation was underway.
In that case Richard Crosbie would go back?
PD: No that wasn’t understood at the time. There was fundamentally a problem with Richard as being Chairman. Yes.
Was it decided that you would become Chairman again before the body itself, the VCCA, was subsumed into the new body?
PD: No it wasn’t at the time. When my year was up I was under enormous pressure to stand again as Chairman. In fact I think I would have been re-elected Chairman. I had made a private decision that I wouldn’t stand because by then, as part of the Project Renewal implementation process, my own Chairman, Alan Parry from Ed Credit, had come on to the Board. Whilst I worked extremely well with Alan within the Board framework of Ed Credit, he and I had quite different views on some things and as Chairman of the VCCA I worked to discharge my obligation to all the members of the VCCA and consequently sometimes didn’t agree with Alan. I was concerned about him being on the Board and me being on the Board and having conflict in front of the other people, and a little of that had occurred. I was concerned that the time I had to commit to the Association was massive, far greater than I anticipated. Gavin Cook had warned me it would take a huge amount of time. I didn’t think that was the case. You know you have got a General Manager and management team, so you should be all right. But they were difficult times. We had major problems with CUACAL, we had Project Renewal implementation, we had a new General Manager trying to settle in, we had reorganisation of services and structures and it just took a lot of time.
CUACAL the other association there, what troubles were you having with them? Were they trying to hold up the process of Project Renewal?
PD: Absolutely. Working to their very best endeavour to stop it.
Any court cases?
PD: Not between CUACAL and us, no, but other credit unions in other States did things. This quickly created divisions in the industry which haven’t healed. Ed Credit had previously enjoyed a very good relationship with Piccol and a very good relationship with the VTU. Those relationships soured quite quickly. But coming back to the VCCA. I felt that as the Project Renewal process was moving well, we had put in place the Regional General Manager in the form of Nichols, that it was appropriate that I come off the Board and the Board would have to accept that Richard, if he was good enough to be the National President, then he had to be the Chairman of our Board. So quietly I discussed this only with Gavin Cook, with whom I have a good relationship and who I have some time for, and advised him of my intentions. Even against his misgivings about Richard he felt that was the appropriate way for it to happen. I lobbied and I think he lobbied, we didn’t really want to do it to formally but we undertook to start a process to get Crosbie re-elected as Chairman, because we knew there would be opposition. I sought to find somebody who would replace me on the Board, that would be critical. That was Peter Ley. He is not a General Manager of his credit union and I went to Roy Smith and asked if Ley was offered a Board seat would that be all right with him. Roy agreed. So I then told Richard Crosbie a couple of days beforehand, I think we were at a meeting, what I was going to do. He was very surprised by it, was quite happy for me to remain Chairman. Anyway on the night of the first meeting, after the AGM and before that meeting I delivered letters of resignation with immediate effect from the Board of FCS, from the Board of the VCCA and as Chairman of the VCCA. I had arranged that Ley be nominated and he was and he went on the Board and was promptly elected unopposed and it all went very smoothly. I made that transition. I was under enormous pressure to stay and that included from Alan Parry, who thought I provided a strong base of leadership. There had been attempts to remove me as a Director of FCS for no other reason than to give the feeling of Project Renewal development and I opposed that because I thought FCS was in some trouble at the time. But in the end I was happy to get off and get away from it all, because the time demand on me was great and I think the outcome was OK.
Were you involved in any other outside organisations like AICUM?
PD: No. I am a member, but no.
Were you involved in a Chapter at all? Chapters?
PD: I am a member but that is it.
So really your endeavours have been with your own credit union that you manage and with VCCA and FCS, of course?
PD: Directly, yes. Indirectly though on AICUM, one of my Managers, Dorothy Sennett is the State President and the National Councillor. One of my Insurance Managers is on the State Insurance Advisory Board and my EDP Manager is on the National EDP Advisory Committee. So indirectly I have got fingers in a lot of pies and my credit union is extremely active in the movement. Supportive of all of the movement these days.
You get involved in the Association of Teacher Credit Unions I suppose?
PD: Yes.
Is there anything that you do there as far as an Executive position is concerned?
PD: No.
So is there any area that we haven’t covered that we should have covered?
PD: Probably a lot, but that is all I am prepared to put on tape. I suppose as a summary, the Project Renewal process took a lot of my time. Again Alan Parry was on that and we had to provide a huge amount of support for him. We had some fundamental misgivings about some aspects of it.
Many people do you know. As I go around I hear them.
PD: However, my Chairman didn’t and my credit union is totally committed to it. I have expressed my concerns and they are noted. My view is that what concerns I’ve got, what concerns I have had, can be worked out. The current management regime of AFCUL will come to an end not too far in the future. I think ultimately there will be retirements and so and I think that is when we will have a change. It is a bit like what happened at the VCCA, there has just got to be a changing of the guard. I think we have got some people in the movement that will represent a very positive development in that regard. The fundamental aim of Project Renewal I highly support. I think we have to have a national developed system. We are very small, $8,000 million in Australia, which is a pimple on the backside of the banking industry. The building society industry is dying and the credit unions have to work together. If they don’t then the industry will go nowhere. So the philosophy I agree with, some of the mechanics I don’t, but my Chairman does. I have got a long enough view so that I am not going to make a big stand on some of these things because I see they will be fixed up one way or another. That is what I am confident will occur. The other thing I am happy about is the AFIC legislation, I think that is a major positive development. Some shortcomings in some of the regulations, but again the guts of it is there. It is like buying a Rolls Royce with maybe sort of door handles missing, or something like that. But the body is there and you can get the rest of it fixed up pretty quick. The ones that are against it, unfortunately in the majority, represent credit unions whose balance sheets don’t meet the prudential standards expected under AFIC. Part of the criticism we are getting from a lot of people reflects any excuse but the full excuse for being concerned about this. That is very sad. The other thing is that I have just been elected, appointed by the Attorney-General, to the Credit Co-operatives Advisory Committee and that will be a very important function. In fact I think that function, I think my role there will be probably the most important I have had since I have been in the industry. Oh, that is not quite right, I think I have played a very important role in getting the VCCA shaped up. But with that knowledge and background and with my affinity to the industry developing, I think being on the Reserve Board Advisory Committee will be extremely important and I intend to work very hard at it.
Have you had anything to do with the Reserve Board?
PD: Officially no.
The Reserve Board was in place? Wait a minute, officially?
PD: That was in place when I arrived yes.
Unofficially? You pass? What are you particularly proud of, do you think, in the credit union movement that you have been involved with?
PD: Beside my own credit union? I am very proud of that of course. I am particularly proud of my development within the VCCA. I think the way the VCCA has developed has been fantastic and I am very proud of that. I think I’ve played a big part in that. I am pretty proud of the way that FCS started to develop when I was there. I think that I am pretty happy with the way that Project Renewal has developed. I was a part of the original meeting that set this thing moving and I think I actually initiated the motion, I don’t remember now, but I was very much a part of it. I guess that I am proud of the fact that my credit union, because it is so strong, has been able to contribute as much as it has through the office.
End Tape 1B: 4734 Words: 1 hour 50 minutes.