The BCCM responds to the Better Competition, Better Prices report

27 March 2024

Responding to the hand down of the inquiry findings on Tuesday, 26 March, BCCM CEO Melina Morrison said, “the Better Competition, Better Prices report is a welcome starting point to explore how best to improve the diversity and sustainability of Australia’s economy in order to ensure fairer outcomes for both consumers and small to medium-sized business owners.  

“The bipartisan report shows we have to go further than piecemeal reforms and look to greater corporate diversity for business models, such as co-operatives and mutuals, that have the potential to scale up and deliver real competition in markets dominated by more traditional corporate structures. Such corporate diversity improves service and pricing because it allows for a range of business strategies each pursuing different business purposes.  

“At a time of growing concern about the lack of competitiveness in some sectors of our economy, there has never been a greater need to look at the operating environment and consider whether it incentivises those models that have the potential to offer a real alternative. This is especially relevant in financial services, as the inquiry has shown.  

“Given a supportive regulatory and policy framework, co-operatives and mutuals are well positioned to support business sustainability, encourage domestic innovation, promote national resilience, and industry revitalisation.  

To that end, we welcome the recommendation that the Treasurer’s Competition Policy Taskforce examine the regulatory environment for co-operatives and mutuals in order to ensure national consistency.” 

Co-ops and mutuals serve communities, delivering benefits to members 

In recommending that the Treasurer’s Competition Policy Taskforce examine the regulatory environment for how co-ops and mutuals can be treated fairly and equally under a principle of ‘no disadvantage’, the inquiry has identified that inconsistent regulation and low awareness of the member-owned business model contributes to suboptimal growth opportunities for co-ops and mutuals. 

“The inquiry has noted the different purpose of co-ops and mutuals to serve communities and deliver benefits back to members rather than profit maximisation to investors. The report asks for the Competition Policy Taskforce to examine best practice from different jurisdictions where co-ops and mutuals represent a significant mass in a range of markets.” 

“The inquiry has noted our call for voluntary legislation, such as recently implemented in the United Kingdom, to ensure legacy assets are preserved for the purpose they were intended and not the subject of asset raids. 

“We also welcome recommendations to ensure customer-owned banks can compete fairly and equally with the big four banks. These measures would stimulate innovative product offerings and services from customer-owned banks, increase profitability and their opportunities to deliver benefits back to their members including in residential lending and small business banking. 

The Committee also noted that: 

Adopting social procurement strategies such as social value considerations could solve the issue of scale that frequently impedes small enterprises, including co-operatives and mutuals, from competing effectively. This approach could help lower the barriers for social enterprises, allowing them to compete more fairly with for-profit entities. 

What Ministers are saying? 

Daniel Mulino MP, Chair of the House Standing Committee on Economics, said in Parliament following the launch of the report yesterday, “Australia needs to lift is game when it comes to competition and economic dynamism.” 

 “Importantly, all 44 recommendations in the report and dozens of key findings were all adopted unanimously. This represents all sides of Parliament working together constructively.” 

Garth Hamilton MP, Deputy Chair of the House Standing Committee on Economic, welcomed engagement of the inquiry with customer-owned banking sector, and noted that the idea of a regulatory grid was raised with the inquiry a lot and that it is pleasing to see this implemented already before the inquiry had even concluded. 

“Australia has concentrated markets in multiple industries, particularly in banking…pursuing further competition in our banking sector means pursuing corporate diversity.” 

“Regulators should be held responsible for ensuring that a wide range of corporate providers are available to consumers, including co-operatives and mutuals.”