Too many people in New Zealand are facing rising poverty, inequality and financial insecurity. The powerful few are getting wealthier and the cost of people struggling is rising rapidly as the gap between the wealthy and poor grows. Why?
Economic development isn’t always working. Policy is often focused on investment however profits are often taken straight back out via dividends paid to investors who are based overseas, our big four Australian-owned retail banks being a prime example. Wealth is being diverted with hardly a drop left for local people at times. The economy isn’t working for many, so what’s next?
We need local economies that put communities first and provide local people with opportunity, dignity and well-being. A river of wealth runs through our communities, we need to capture it as it already belongs to us as producers, consumers and taxpayers. Local and central government departments and agencies, hospitals, universities and schools all use ratepayer and taxpayer money to invest as they continue to build facilities and procure goods and services on a grand scale. We should take control of this wealth so that the economy works for us.
We can set up co-operatives, mutuals and societies for everyday goods and services so that suppliers, customers and workers have 100% ownership and control, along with a real stake in the wealth that they create. Under the co-operative business model, Members (suppliers, customers or workers) gain economic benefits based on volumes supplied (e.g. milk, livestock or horticultural produce), or the amount of business transacted in a given year (e.g. building materials sourced through a parent company, or investments made with a bank by its customers).
It is this model which best provides fairness and equity along with reward for economic participation – the more you put in, the more you get out.
Member-owned and led organisations that are here for the long term, with Members having “skin in the game”, are in stark contrast to investor-owned and led organisations which can see investors and their investments here today and gone tomorrow.
Of NZ’s top 30 co-operatives (including mutuals and societies), which currently generate almost one-fifth of NZ’s GDP, at least 80% are now over 25 years old while five are over 100 years old.
These are sustainable businesses that have provided Kiwis with trusted brands, products and services across generations. Commercially-driven businesses which give back generously to Kiwis along the way.
In addition, and perhaps more importantly, payouts to Members (e.g. for produce supplied, services provided or via rebates and dividends) are retained here in NZ leading to local wealth creation.
In terms of banking, we can support local finance and investment providers, community banks and credit unions so that everyone thrives locally. It is time for local wealth-building to become mainstream while we amplify what’s already happening through co-operation, policy solutions and a shared belief in wealth for all while keeping this local.
The co-operative business model, with its seven founding Rochdale Principles, is best placed in driving local wealth creation and retention, reducing poverty and inequalities, and supporting the UN’s 17 Sustainable Development Goals as, together, we seek to make the world a better place for our future generations.
There are now more than 250 million co-operatives globally, generating over $US3 trillion in annual revenues each year and serving more than one billion Members. This business model provides vast scale, diversity and most importantly true sustainability – economically, environmentally and socially.
The NZ economy needs to become even more co-operative so that Kiwis can thrive in a system that is fair and equitable, democratic and autonomous, and with genuine regard for local communities. Make it co-operative and keep it local!