Aust Unity takes first step towards demutualisation

Australian Unity members have taken the first steps in the long demutualisation process by voting to allow the matter to be put to members.

At the company’s annual general meeting in Melbourne yesterday, 97 per cent of votes were in favour of inserting a rule into its constitution setting out the procedures for demutualisation.

The new rule states that any demutualisation proposal put to members has to be approved by a 75 per cent majority vote. The rule also states that 20 per cent of the company’s 200,000 members have to attend a demutualisation meeting, either in person or by proxy.

“Demutualisation would be a fundamental change to our organisation, and a very significant number of members have told us they want us to ensure appropriate processes are followed,” said Australian Unity chairman Alan Castleman.

The vote, however, was not without challengers, with the chairman questioned by some members concerned about the potential change in the structure of the former friendly society.

One member of 60 years standing said he had joined the Australian Natives Association (ANA) (one of the merged entities of Australian Unity) because it was a mutual.

“I joined the organisation (ANA) for healthcare, and I believe it is important to keep this separate from the financial services company,” he said.

“Members should be very wary of demutualisation, as a predator could take over the company and take healthcare away from us.”

Member Eleanor Ray also believed demutualisation raised questions about the future provision of healthcare for members.

“I shopped around for healthcare and chose Grand Mutual (which has recently merged with AU) because it was a mutual,” she told the meeting.

“I believe we should stick to the mutual structure, as it will benefit the healthcare members.”

Castleman said the company would continue to offer attractive healthcare products for its members, and more would be explained in the demutualisation options document that would be sent to members in December.

This document would also provide details on how long-standing members would be allocated shares over more recently joined members, which was a concern of some people at the meeting.

Meanwhile, Australian Unity is to establish a health and ageing think tank to be run by former Heine Management chairman and Tasmanian state MP Neil Batt.

The Australian Centre for Health Research has been seed-funded by the company, and Castleman said Australian Unity hoped to attract support from other health funds, the Australian Medical Association, hospitals and government.

“The centre will play a much needed role in conducting and promoting research into many critical areas relating to health and ageing in Australia,” he said.

“We expect to have substantial support from other organisations, including other health funds, for this work and we have many projects in mind for the centre.”

Australian Unity is also establishing a charitable foundation that would focus on providing support for research into health and aged care and other community activities.