The Labor Party has committed to a suite of innovative policy reforms designed to support Australia’s Cooperative and Mutual Enterprises sector.
A lack of competition for the big banks is one of the reasons that the rorts and rip-offs we’ve seen in the financial services sector continue to harm consumers. Mutual banks and credit unions can help increase competition to get better outcomes for Australians.
At the moment, member-owned firms like these are at a competitive disadvantage to corporations in accessing capital to expand their operations, competing on a level playing field, and staving off hostile takeovers.
Labor is making a commitment to implement key bipartisan recommendations in the Senate Economics References Committee’s March 2016 report into cooperative, mutual and member-owned firms.
These reforms will facilitate fairer access to capital for credit unions and building societies to compete effectively with large banks, clearly define mutual enterprises and director’s duties in the Corporations Act, and remove unnecessary regulations and thresholds.
- Amend the Corporations Act to define mutual enterprises;
- Implement reforms to facilitate new financial instruments for member-owned firms;
- Offer in-principle support for the reintroduction of the Corporations Amendment (Crowd-sourcing funding) Bill 2015 with amendments to ensure unnecessary regulatory imposts are removed, and that the bill serves the capital needs of small and start-up enterprises;
- Amend the Corporations Act to define director’s duties in member-owned firms to give clarity to stakeholders;
- Acknowledge the importance of better and more equal access to capital for credit unions and mutuals;
- Consult with stakeholders on the removal of dual regulatory requirements on cooperatives that seek to issue securities (member shares or securities such as CCUs) across state borders, and broader capital issues;
- Consult with stakeholders on active membership requirements, and saleable but indivisible membership; and
- Commit to removing the arbitrary threshold that only enables incorporated entities to receive grants above $500,000 which discourages co-operatives, particularly those owned by Indigenous groups.
These reforms will promote ethical competition and productivity, as well as encouraging social investment and the well-being of workers and small businesses.
Only a Royal Commission into Australia’s banking and financial services sector can properly change the culture and practices within this industry. But greater competition from a strong mutual and co-operatives sector will also make a difference.
THURSDAY, 10 NOVEMBER 2016
MEDIA CONTACT: TAIMUS WERNER-GIBBINGS 0437 323 390