Cooperatives, mutuals and member-owned firms have a proud history in our nation, offering 8 in 10 Australians an alternative model to profit-driven enterprises.
Today Senator the Honourable Zed Seselja, Assistant Minister for Treasury and Finance, along with the Chair of the Parliamentary Friends of Mutuals and Cooperatives, Senator the Honourable Bridget McKenzie, met with leaders of cooperatives, mutuals and member-owned firms, where they reaffirmed the Liberal-National Government’s commitment to supporting the sector.
These firms connect with Australians through a range of customer and community-focused services across many industries including agriculture, banking and finance, housing, insurance and retail. However, barriers to their growth have meant that they are unable to reach their full potential.
“Recognising the importance of the sector to the economy, the Government accepted all of the Hammond Review’s recommendations to strengthen the mutual sector in providing greater choice and better services,” Assistant Minister Seselja said.
“Our reforms will mean more opportunities for mutual organisations by allowing them to raise the funds they need to make long-term investments for the benefit of their members. This will enable them to grow their presence in key markets such as banking, insurance and healthcare,” Assistant Minister Seselja said.
The proposed first phase of legislation will introduce a definition of a mutual into the Corporations Act — a significant step in recognising the important role of the sector.
Minister McKenzie, Chair of the Parliamentary Friends of Mutuals and Cooperatives, took the opportunity today to reinforce the importance of the mutual and co-op sector to the economy, with the Senate Inquiry into Co-operative, Mutual and Member-Owned Firms Report estimating that eighty five percent of Australian adults are members of at least one co-op, with a combined $710 billion in total assets of the mutuals and co-ops.
“These changes will benefit both the mutual organisations and co-ops by allowing them greater flexibility to grow their businesses and it will also benefit the community through greater choices for banking and other retail services,” Minister McKenzie said.
“The Senate Inquiry really kicked off this process and it is great to see these real reforms moving forward.”
The proposed changes have strong support from the sector, with Customer Owned Banking Association CEO Mike Lawrence highlighting the impact these changes will have on member-owned banks.
“Lower barriers to capital raising by mutual banks, credit unions and building societies is a significant step forward in promoting competition in banking,” Mr Lawrence said.
Melina Morrison, CEO of the Business Council of Cooperatives and Mutuals, said the second phase of the draft legislation would allow the sector to better serve Australians.
“We are looking forward to seeing the second part of this work with Treasury, to create a new capital instrument that may be issued by mutuals, enabling them to grow and better serve Australians, whilst protecting their co-operative ownership structures,” Ms Morrison said.
“The Liberal-National Government is taking action to allow mutuals to invest, grow their customer base and compete with other investor owned corporations. We are pleased to progress these important reforms as we are committed to seeing more competition and more options for customers in all industries across the economy,” Assistant Minister Seselja concluded.