The Turnbull government has launched a consultation on reforms to help co-operatives, mutuals and member-owned firms in Australia so they can invest, grow and employ more Australians.
Greg Hammond OAM will now act as an “independent facilitator” to conduct consultations on the recommendations laid out in the Senate’s economic references committee’s 2016 report Cooperative, mutual and member-owned firms.
The 17 recommendations of the report included undertaking a national collection of statistics to provide an accurate picture of the scale and extent of the co-operative and mutual sector, developing a program to encourage the establishment of new co-operatives and mutuals, considering the inclusion of these businesses in accounting, business, commerce, economics and law degrees, and ensuring that the regulatory burden for small and medium-sized co-operatives and mutuals does not disadvantage them.
It is expected that Mr Hammond will develop a government response that could “deliver meaningful reforms for the sector”.
Treasurer Scott Morrison commented, “Co-operatives, mutuals and member-owned firms contribute around 7 per cent of GDP in Australia and the Turnbull government is committed to ensuring these enterprises are competitive and can access the capital they need to grow, create jobs and best serve their members…
“The government recognises the importance of these organisations for many sectors of the Australian economy. There are over 2,000 co-operative and mutual businesses in Australia representing 29 million active memberships. It is estimated that eight in 10 Australians are members of at least one co-operative or mutual organisation. In the banking sector alone, customer-owned banking controls about 10 per cent of the home loan market.
“As such it is critical that Australia’s regulatory and legislative framework keeps up and helps this sector continue to grow and provide competition in sectors such as banking and insurance. A stronger co-operatives and mutuals sector will provide Australian consumers with better choices and more cost effective options.”
Mr Hammond will make recommendations to the government on whether there should be regulatory or legislative changes to improve Commonwealth-regulated co-operative and mutual enterprises’ access to capital and whether ‘mutual enterprise’ should be explicitly defined in the Corporations Act 2001.
Mr Hammond is expected to report to government by 14 July 2017.
Speaking of the announcement yesterday, the CEO of the Customer Owned Banking Association (COBA) Mark Degotardi said, “This is welcome recognition of the value of our customer-owned model and the contribution we make to competition and consumer choice…
“This issue is one of COBA’s current top three regulatory reform priorities and a critical focus for the broader co-operative and mutual sector, so [this] announcement by the Treasurer is very welcome indeed.
“We commend the Treasurer on his commitment to a regulatory and legislative framework that helps the co-operative sector grow and provide competition in banking and other industries.
“As the Treasurer has stated, ‘a stronger mutuals sector will provide Australian consumers with better choices and more cost effective options’. On behalf of the customer-owned banking sector and our four million customers, COBA looks forward to participating in this consultation.”
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