Introduction of Bill to Senate brings reforms for mutuals one step closer
The Business Council of Co-operatives and Mutuals (BCCM) welcomes the Government’s publication of landmark legislation that will unshackle co-operatives and mutuals, including customer owned banks, to compete with listed companies in their industries, providing greater competition and choice for customers.
The Treasury Laws Amendment (Mutual Reforms) Bill 2019, when fully enacted, will implement the following key reforms:
- Defining a mutual entity
- Reforming the demutualization rules to only be triggered in an intended demutualization
- Creating a mutual specific Mutual Capital Instrument (MCI)
Coming in the wake of the damning Banking Royal Commission Report, this legislation is the result of a rigorous development process following the Independent Facilitator Review Report on Reforms for Cooperatives, Mutuals and Member-owned Firms conducted by Mr Greg Hammond OAM in 2017. Then treasurer Scott Morrison accepted all the recommendations of this review.
Melina Morrison, BCCM’s CEO, said, “This is the first enabling legislation for federally registered co-operatives and mutuals in 20 years and we welcome the bipartisan support we have had all the way along for these vital reforms. Continued bipartisan support will ensure the timely passage of this legislation through Parliament.
“The sector has waited a long time for measures to simply compete on a level playing field with listed companies. In this era of accountability this reform will go a long way to addressing the imbalance in corporate diversity. This is mature and considered legislation which will enable mutuals to grow and compete. By prioritising and publishing this bill, the Government has taken one huge step toward leveling the playing field for ethical business models like co-operatives and mutuals.
“As we saw last week, angry consumers demanded action and it is reassuring to see the Senate listened. This will be a key year for business models that put the consumer first as more and more people call for accountability in sectors ranging from finance to aged care. Co-operatives and mutuals are directly accountable to customers through their member-owned structure. Co-operatives and mutuals will always outperform other business models when it comes to putting people first because there simply is no conflict between shareholders and customers. They are one and the same. ” Ms Morrison continued.