Billy Kelleher (Cork North Central, Fianna Fail) | Oireachtas source

I welcome the opportunity to speak on this Bill. That it is being discussed on the floor of the Dáil gives us an opportunity to talk about the impact the co-operative movement has had on the country over many years, primarily through creameries and credit unions. These represent two obvious areas where co-operatives have been very much part of commercial life over the years. Anything that would incentivise the co-operative mindset and encourage people to come together collectively to address deficiencies in their communities or services or start with a concept is to be encouraged and welcomed. From that perspective, the thrust of the Bill is welcome.

There is an ongoing consultation process concerning legislative supports for co-operatives and how they function. This Bill could feed into that through a robust pre-legislative scrutiny process involving all the stakeholders intimately involved in the co-operative movement.

Co-operatives are for the benefit and participation of members and are based on membership loyalty. These are the three cornerstones of the co-operative movement. They have served this country exceptionally well. One could argue there should have been a greater proliferation of co-operatives in other areas. There have been quite a number of successes, however, primarily in agriculture and the credit area. Some of the largest Irish companies operating internationally serve as examples. Kerry Group was spawned from the co-operative movement in west Kerry. Huge companies have been created out of the co-operative concept. We should always try to ensure co-operatives are run in a way that is beneficial to their members while at the same time advancing the concepts of entrepreneurship and enterprise. They should not be allowed to stagnate and should reinvest continuously. They should not exist solely to serve the present membership but to work towards the development of services for the years ahead. Sometimes co-operatives failed to be innovative beyond the original concept for which they were established. We should try to encourage innovation in the context of the debate on the co-operative movement.

Reference has been made to the Scandinavian countries, Germany and the Baltic states where there has been a strong history and tradition of co-operatives. There is no doubt that they have benefited countries and economies over many years. They have a role to play in developing services in certain areas of the economy.

Reference has been made to alternative energy. One could argue that biomass and bio-digesters, for example, present opportunities for the coming together of communities and individuals in collective partnership, under a co-operative-type concept, to produce energy and afford associated benefits in the broader communities where the relevant infrastructure is located. One could argue a co-operative concept with buy-in from a community is welcome. If a co-operative is for the benefit and participation of its members, and is based on their loyalty, the concept of co-operation would be very much part of the ethos.

In trying to encourage the co-operative movement, one has to accept that one cannot give an unfair advantage to one group over another, particularly in commerce and business. Where there is limited liability for members of co-operatives by comparison with individuals involved in the same type of industry, business or enterprise elsewhere, the legislation must be fair, balanced and impartial to ensure no one has a significant advantage over another. With regard to tax liabilities or limited liability, for example, there should not be displacement by co-operatives of individuals who have established their own companies. There should at least be an element of balance.

The Irish Co-operative Organisation Society has made observations on this Bill. Overall, it is broadly supportive of it. One could argue some of the issues over membership and the make-up, such as the change in the registration number from seven members to three, and issues concerning taxation and the audit exemption, give rise to concerns. If, however, we accept we should encourage, foster and incubate the concepts of co-operatives, allowing them to become innovative, see beyond their immediate remit and evolve continuously, they can avoid stagnation. Certain co-operatives stagnated once their initial membership fell away. Very few were able to continue to evolve and be creative. Something that could stimulate a yearning to evolve continuously and respond to advances in technology and changes in the economy, society, general outlook, legislative supports, statutes and taxation would be beneficial.

It would be a good concept to bring this Bill into the pre-legislative scrutiny process. The Government has had a stakeholders' consultation process and, with that in mind, we could ensure that whatever Bill is brought back to the floor of the Dáil has broad support and takes into account the practicalities of what a co-op should be about, not an ideological view of what a co-op is about. It is for members and for participation and it stresses loyalty from and to membership while, at the same time, being creative and consistently innovative. The co-ops that have been successful in this country are ones that have been dynamic but many have been lethargic. Once the initial fervour of the establishment of the co-op fades away, there is little left, the co-op is hollowed out and does not make a contribution. I would like to see ideas around that concept and how to create a framework for co-ops to consistently innovate. That would require imagination in taxation and incentivisation through the taxation codes primarily.

There is potential. There were successes in the original creameries, which were established long ago, and in the credit union movement. There is opportunity in the area of alternative wind energies for individuals to come together in a community wherein they can establish these types of infrastructural developments for the benefit and participation of members and the community. A sharing of dividends within that community and the broader community is a good concept and should be encouraged.

While I support the concept of the Bill, it needs to go through some form of scrutiny to embrace the concept of what a co-operative should be, pragmatically speaking, rather than just ideologically.

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