CEOs from the co-operative and mutual sector will hold a joint press conference with the Assistant Minister for Treasury and Finance, Senator the Hon Zed Seselja and Deputy Leader of The Nationals Bridget McKenzie, to welcome new draft legislation and affirm the Government’s commitment to phase two of the legislative process.

The new legislation when fully enacted will allow co-ops, mutuals and mutual ADIs to raise capital and compete with the big banks and other investor-owned firms.

The Government will affirm its commitment to implementing the second phase, which will allow all mutuals to raise capital by issuing mutual capital instruments, improving their ability to invest, grow and compete with other investor-owned corporations.


  • For the first time, the Corporations Act will correct a longstanding omission, by defining a mutual company, which is the key to opening up a range of new opportunities for mutuals.
  • Following on from this, the draft legislation also reforms the often mis-applied demutualisation enhanced disclosure provisions that affect mutual banks and friendly societies – Part 5 of Schedule 4 of the Corporations Act. Once passed, this reform will lead to the withdrawal of ASIC’s Regulatory Guidance note (RG147)

Melina Morrison, CEO of the cross-sector peak body, the Business Council of Co-operatives and Mutuals (BCCM) said:

“New legislation is needed to make the Australian Corporations Act work better for mutually owned businesses, so that they can compete on a level playing field with other types of firms.

Over the last nine months, BCCM has worked with its member businesses and peak bodies including COBA to try to positively influence how the Government implements the recommendations of the Hammond Review¹.

Today we are delighted to see the first of two pieces of draft legislation that will help to deliver on the Government’s promise to our sector. The bipartisan nature of this process has been very encouraging.

We are looking forward to seeing the second part of this work with Treasury, which will create a new capital instrument that may be issued by mutuals, enabling them to grow and better serve Australians, whilst protecting their co-operative or mutual ownership structures.”

CEO of Credit Union Australia, Rob Goudswaard, said:

“Having the ability to raise Tier 1 capital will be a game changer for member-owned banking organisations like CUA. It will make us much more competitive by giving us the flexibility to raise capital when strategic opportunities arise – this will be crucial as we look for ways to future-proof and grow our business, while continuing to improve the services we provide our members. At present, CUA funds these activities out of retained earnings, which restricts our ability to invest for the future.

“Access to capital will give us the ability to support the initiatives that provide the most benefit to members, whether they involve new technology initiatives, innovation collaborations, growing member services and products, or increasing CUA’s geographical reach.”

CEO of Australian Unity, Rohan Mead, said:

“Mutuals have played an important part in Australian society for close to 200 years – providing access to a range of essential services including banking, health services, insurance and retirement living. It is important for the sector that the mutual corporate form will be recognised in legislation. It provides customers and the community with greater choice, and helps mutuals compete on a more even playing field with shareholding companies.

Australian Unity is particularly pleased that the Government will prioritise further legislative amendments to facilitate mutuals accessing to new forms of capital.

As our population ages and chronic disease continues to rise, Australia faces a significant shortfall in social infrastructure. A report we commissioned this year from PwC highlights that by 2025 we will need at least an additional $37 billion in funding to build and provide health, aged care, housing, disability care and other social services facilities for the population. Access to new forms of capital will mean that mutuals, which are able to take a patient, long term view, can play a key role in helping address these looming challenges.”

CEO of RACQ Group, Ian Gillespie, said:

“Now more than ever it is important that mutual organisations are able to grow and compete with listed companies, particularly in financial services. 

Mutual companies like RACQ have been built on a foundation of trust and a service culture. The ability to grow and access capital without having to demutualise is essential for the future diversity and, dare I say, reputation of our banking and insurance sectors. Rather than being forced to abandon such a customer-centric model to fund growth, membership organisations need to be encouraged to flourish and provide even more choice for the community and competition for the large listed companies.

RACQ exists to benefit members and their communities and has done so for more than a century. We proudly work for our members, not the bottom line.

Mutuals have an essential role within our community and economy and we welcome this move by the Federal Government to ensure we can compete on a level playing field when it comes to access to capital.”

CEO of P&N Bank, Andrew Hadley, said:

“This game changing legislation will unshackle our sector from anti-competitive capital raising restrictions that have always impeded our capacity to differentiate and grow.  The ability to raise CET 1 capital without demutualising will afford customer-owned banks like P&N the opportunity to invest more broadly in innovation and acquisition – vital in this technological age.  As a result, Australian consumers will be rewarded with more genuine competition and choice.”


13 leading mutual businesses participated as full project partners in this effort, and have actively contributed to helping shape the sector’s positions on new legislation:

  • Australian Unity
  • People’s Choice Credit Union
  • Bank Australia
  • P & N Bank
  • CUA
  • RAC WA
  • Defence Bank
  • RACQ
  • HCF (Health Insurer)
  • Teachers Mutual Bank
  • Heritage Bank
  • Qudos Bank
  • NRMA

In addition, two colleague organisations provided expert input throughout this phase:

  • Customer Owned Banking Association (COBA)
  • Friendly Societies of Australia (FSA)

Further Reading

Government backs more choice for Australians – Senator the Hon Zed Seselja

¹ Independent Facilitator Review Report on Reforms for Cooperatives, Mutuals and Member-owned Firms

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