Federal Treasurer Scott Morrison’s consultation into reforms to support co-operatives and mutuals has the potential to create thousands of jobs by unlocking cash worth at least $25 billion for a flagging Australian economy, says Business Council of Co-operatives and Mutuals CEO Melina Morrison.
Ms Morrison was welcoming a decision by the Treasurer to appoint consultant Greg Hammond to consider reforms to help her members remain competitive and access the funds they need to grow and create jobs.
“I welcome Mr Hammond’s appointment to perform this vital task,” said Ms Morrison, who is the head of the nation’s co-op and mutuals peak body, representing over 2000 firms.
It is estimated that eight out of 10 Australians are members of at least one co-operative or mutual.
“I am confident that, if Mr Hammond listens to all parts of the sector, he will see that a modest change to the Corporations Act will break the shackles that hold back these groups.
“It is also heartening to see the Treasurer acknowledge the huge contribution our members make to the nation’s economy and make legislative reform in the sector a priority for the Turnbull Government.
“Australia’s co-operative and mutual sector has been held back for too long by these outdated provisions.”
Presently co-operatives and mutuals can’t raise capital by issuing securities to members without risking the loss of their mutual status.
Other comparable nations have specific legislation around co-operatives and mutuals and have seen them prosper and boost economic growth.
According to an estimate by KPMG, if the changes were made, mutuals in the banking sector alone could raise an extra $25 billion in capital, boosting profits by $375 million.
Given that banking is just one area of the economy where mutuals operate, the true growth would be much greater, Ms Morrison said.
“If the goal is to encourage competition across the economy you need competitors. The federal Government has recognised that there is an advantage for non co-operative, investor-owned businesses. Let’s level the playing field for all competitors.”