Senator The Hon. Zed Seselja
Assistant Minister for Treasury and Finance
The Morrison Government is committed to supporting cooperatives, mutuals and member-owned firms in Australia so they can invest, grow and employ more Australians. A stronger cooperatives and mutuals sector will provide Australian consumers with more choices and more cost effective options.
Draft legislation to provide a definition for a mutual entity in the Corporations Act and to clarify the uncertainty around the demutualisation provision of Part 5 Schedule 4 of the Corporations Act has been released by the Government for public consultation.
The legislation forms the first phase of a two-phased approach to the implementation of the recommendations of the inquiry into Reforms for Cooperatives, Mutuals and Member-owned Firms, conducted by
Greg Hammond OAM.
The proposed legislation provides a definition of a mutual entity to recognise the sector in the Corporations Act and to determine which mutual entities will be able to raise capital through the issuance of mutual capital instruments, to be implemented in the second phase.
The proposed legislation will also address the uncertainty in Part 5 Schedule 4 of the Corporations Act to enable mutually-owned Australian Deposit-taking Institutions (ADIs) to raise capital by providing that the enhanced disclosure requirements are only applicable where an entity no longer meets the definition of a mutual entity.
While the first phase is designed to allow mutual ADIs to raise capital and compete with the big banks, the Government is also committed to implementing the second phase which will allow other mutuals to raise capital by issuing mutual capital instruments to invest, grow and compete with other investor-owned corporations.
Stakeholders are invited to view the draft legislation and lodge submissions via the Treasury website by 1 November 2018.