Seven months after the ACTU started Virtual Communities (VC), the Labor Council of NSW launched Get On Board Ventures "to correct " deficiencies in VC's model.
The ACTU, who set up VC (in Melbourne) to offer its members discounted PCs and Internet access, currently has an equity stake of less than five percent in the venture, which is majority-owned by ISP Primus, AXA and various industry superannuation funds.
Get On Board, on the other hand, is two-thirds-owned by the Labor Council of NSW and the NSW ALP. Financial services company, Kingsway Capital, holds the remaining one-third stake in the venture.
"This deal provides the Labor Council with significant equity in recognition of the important asset we bring to the venture _ our network of union members. This means the business will be majority owned by working people and their representatives," said Michael Costa, NSW Labor Council secretary. "Why, I asked, was the ACTU giving away its greatest asset in the new economy, its network of members, for next to nothing?"
Profits from the Get On Board venture will be used to further develop the Labor Council's Web site. "Because the asset remains in the union movement's hands, profits from the venture will be channelled back into improving the union movement's presence on the Web," said Costa. He also said that the Labor Council and the NSW ALP would earmark a proportion of their stake for individual affiliates.
ACTU secretary Greg Combet today (28th June) responded that workers have a considerable stake in VC, as Australian Retirement Fund, LUCRF (the liquor union fund) and SERF (seamen's fund) had 120 million of the 225.6 million issued shares, while five unions between them held 18 million shares.
Combet also said that the ACTU initially had an arrangement for earned equity (it was entitled to 35 percent of net revenue) but had now supplemented that with an arrangement to hold 1.2 million shares, worth about $900,000.
Under Get On Board's deal, Labor council's 800,000 and NSW ALP's 200,000 members pay $9.95 per week for the PC and Internet package or $1,680 in total. In comparison, VC's package costs $2000 in total, or $1750, if affiliate groups members pay upfront.
The Labor Council plans to extend its PC and Internet offer to members of other unions throughout Australia which could see its customer base increase to 1.8 million customers, according to Peter Lewis, NSW Labor Council's consultant. It may also make the offer available to the general public in the future.