The “missing middle” of the economy wants support

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The “missing center” of the economy deserves a boost in the next federal budget, says a top committee.

In manufacturing and finance in particular, seed funding for the growth of medium-sized and larger companies could bring both economic and social benefits, the Business Council of Cooperatives and Mutuals said on Monday

“People and businesses have moved to the regions as a result of the pandemic,” said BCCM chief executive Melina Morrison.

“It will be important to secure this value for the benefit of the regions where the growth is taking place.”

Community-owned companies could also be the answer to supply chain issues raised by the pandemic, she said.

The cooperative model is an alternative economic development strategy that is underused in Australia, according to the budget pitch for a well-funded “Thriving Regions” program.

Australia could aspire to the German Mittelstand or an Australian version of the successful cooperative business clusters in Italy’s Emilia Romagna or the Spanish Basque Country.

The HunterNet Co-op, an industry cluster of small and medium-sized companies, has played a significant role in Newcastle’s manufacturing base and could be a model for regional Australia, the umbrella organization said.

The cooperative structure is the ‘secret ingredient’ where members benefit from access to group training, networking, advocacy support and joint offerings for contracts too large for a single company.

“Filling in the missing middle of Australian manufacturing can be achieved through cooperatives,” Ms Morrison said.

Since its inception around the time of BHP’s departure from Newcastle and significant economic upheaval, HunterNet now represents 200 member companies employing a total of 70,000 workers in the manufacturing, engineering and defense industries.

The network has a combined turnover of more than A$80 billion.

Another example in the budget proposal is a co-operative formed on South Australia’s Fleurieu Peninsula to reopen a mothballed local slaughterhouse.

Unlike traditional agricultural cooperatives, the cooperative will be jointly owned by workers, wholesale and retail customers and primary producers.

The co-op is trying to raise $1.2 million from members using so-called co-op capital units to reopen the slaughterhouse and build a “paddock-to-plate” brand.

More regional cooperatives can attract private investment with access to the right technical support and business advice, the umbrella organization says.

The government’s goal of a $100 billion agricultural sector by 2030 would also be more achievable with a thriving cooperative sector and its “multiplier effect” in regions, the bill says.

The high-tech industry association represents more than 11 million individual members, including 60,000 companies.

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