Attaining the Australian Dream: The Starr-Bowkett Way

Abstract

a person's ability to achieve some degree of economic and even social independence. This is most significant with respect to housing finance. Loan limits, high interest rates and an unwillingness on the part of the formal financial sector to lend to lower income earners would have doomed this sector of the population to a life of tenancy without co-operative finance schemes such as Starr-Bowkett societies. Starr-Bowketts are co-operative, non-profit financial institutions that provide interest-free loans to their members and operate on the principle of mutual self-help as espoused by Dr TE. Bowkett in 1843. This paper examines the growth of these societies in New South Wales over the period 1900-30, and considers the impact that the existence of and growth in these societies had on extending the economic capacity of those neglected by the formal financial sector. The Australian dream of a house on a quarter-acre block with room for a shed, a couple of chooks and the ubiquitous rotary clothes line dates back to the post-World War I period, when population pressures and lack of rental properties combined with property tax changes rapidly increased the rate of home ownership from about 30 per cent at the beginning of the twentieth century to 40 per cent by 1930 and then to over 70 per cent in the 1960s.1 One of the major problems that faced many of those aspiring to attain the Australian dream was an inability to access housing finance. Loan limits and an unwillingness on the part of the formal financial sector to lend to lower income earners and women would have doomed this sector of the population to a life of tenancy and dependency if it had not been for co-operative finance schemes. Co-operative finance encompasses credit unions and various types of building societies, co-operative, permanent and terminating. This paper concentrates on one specific form of terminating building society, Starr-Bowkett Societies, and examines the growth of these societies in New South Wales (NSW) over the period 1900-30, their membership, their importance within the co-operative finance sector and the extent to which the societies followed the ideals espoused by their progenitor, Thomas Bowkett. This time period has been selected as the first three decades of the twentieth century witnessed substantial growth in the number, membership levels and geographic spread of Starr-Bowkett societies. This rate of growth was such that their number and importance within the housing finance market overwhelmed that of the more well-known permanent building society model. Yet despite this, Starr-Bowketts have received little attention in either the literature examining the housing finance sector or that concerned with the co-operative movement. The omission of Starr-Bowkett societies within the latter literature may be explained by a lack of understanding of the true nature of the societies, which in turn may be a reflection of a general ignorance regarding not just their manner of operation but more substantially their actual existence. In the few places where Starr-Bowketts are mentioned the information provided is sparse and tends to argue that such societies were always only a small part of the mortgage market, implying that on this basis no further analysis is understandable and justifiable.