Senator The Hon. Zed Seselja
Liberal Senator for the ACT
Assistant Minister for Treasury and Finance
Senator The Hon. Bridget McKenzie
Deputy Leader of the Nationals
Chair of the Parliamentary Friends of Mutuals and Cooperatives
Today the Government is demonstrating its commitment and support for cooperative, mutual and member-owned firms by introducing legislation that will substantially increase their ability to raise the funding they need to grow, innovate and compete.
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.
“Cooperatives, mutuals and member-owned firms have long delivered high quality customer and community-focused services to Australians, across industries as diverse as agriculture, banking, housing, insurance, and retail,” Assistant Minister Seselja said.
“These reforms represent a significant step forward in recognising a vital sector of the economy, and will mean these firms will be able to compete more vigorously with their investor-owned competitors, delivering benefits for all Australians,” Assistant Minster Seselja said.
Minister McKenzie, Chair of the Parliamentary Friends of Mutuals and Cooperatives, said today’s introduction reinforced the Government’s commitment to supporting the mutuals and co-operatives sector.
“These changes will benefit the sector, and Australians, by allowing these member-focussed organisations greater flexibility to grow their businesses, and providing more choices to Australians for banking and other retail services,” Minister McKenzie said.
Mike Lawrence, CEO of COBA welcomed today’s introduction of legislation and said, “with greater competition, comes greater customer outcomes. The introduction of this legislation is a step in the right direction to creating a more competitive banking sector.”
Melina Morrison, CEO of BCCM said of the introduction, “this is mature and considered legislation which will increase competition and choice across a wide range of industry sectors by enabling mutuals to grow through access to new capital investment.”
“The sector has waited a long time for enabling measures to simply compete on a level playing field with listed companies. In this era of consumer accountability this Bill will go a long way to redressing the imbalance in corporate diversity.”
Treasury Laws Amendment (Mutual Reforms) Bill 2019 introduces a number of reforms, including introducing a definition of mutual entity to the Corporations Act (2001) (the Act) for the first time. It also removes the uncertainty for transferring financial institutions and friendly societies under the demutualisation provisions in Part 5 of Schedule 4 of the Act.
The reforms will also create a new type of capital instrument, a Mutual Capital Instrument (MCI), specially designed to meet the unique requirements of the sector. To facilitate the use of the MCI, the reforms will also provide mutual entities with a special standardised procedure that will allow them to make the necessary amendment to their constitutions to allow them to issue the MCI.
This Bill implements the legislative recommendations of the Hammond Report on Reforms for Cooperative, Mutuals and Member-Owned Firms.