08 November 2017
Federal Government to unlock potential of Australian co-op and mutual sector: sector peak body CEO available for comment
- Government adopts all recommendations of Hammond Review to grow co-ops and mutuals
- Capital raising will be possible for co-op and mutual sector representing more than 8% of the Australian economy
- Customer-owned banks acknowledged by Treasurer Scott Morrison as crucial to improving consumer competition and choice in the banking industry
- Customers to benefit in health, aged care, farming and roadside assistance
- Profits remain in Australian communities
In a move that will unleash opportunities for new investments in Australian business, the Federal Government is signalling its commitment to long-termism, social responsibility and domestic ownership.
The new laws adopt all 11 of the recommendations made in the Hammond Review on regulatory or legislative changes to improve access to capital for co-operative and mutual enterprises (CMEs).
Until these changes are approved, co-operatives and mutuals cannot raise capital by issuing securities without risking the loss of their mutual status.
Once they pass, member-owned businesses will be more able to make strategic investments while ensuring there is sufficient liquidity to meet any short-term obligations.
“This is a game changer that will unshackle the sector and allow the flow of billions of dollars of previously untapped investment to flow to Australian-owned businesses,” says Melina Morrison, CEO of the Business Council of Co-operatives and Mutuals (BCCM), whose organisation represents more than 2000 co-ops and mutuals.
“Our sector welcomes this move by the Federal Government.”
She said the reforms would also have implications across the nation’s economy, given that co-ops and mutuals already make up more than 8 per cent of the nation’s GDP.
“Money invested in co-operatives stays in the communities where the members are and flows through to surrounding businesses.”
“At a time when revelations of global tax evasion are multiplying, today’s announcement by the Federal Treasurer will help Australians keep company profits onshore.
“The move will also help to level the playing field for customer-owned banks, creating healthy competition for the listed, investor owned banks. Consumers will be the winners in this.”
“From an economy-wide perspective, investment in this sector represents a pivot to long-term thinking away from the sugar hits of the sharemarket.”
“The new law will allow capital to flow into sectors ranging from health insurance and aged care, right through to farming, and roadside assistance.”
“Better yet, because customer-owned businesses redeploy surpluses to benefit members, not shareholders, any additional money is guaranteed to stay in Australia and boost the Australian economy,” Ms Morrison says.
Hammond Review report and Government Response
Watch the Hammond Review Announcement Press Conference
Other media releases about this announcement: