Co-Op Reform Offers Level Playing Field

Businesses and Governments have welcomed the launch of the Co-operatives National Law (CNL) saying it would enable co-operatives to operate more easily across borders and make them a more attractive business model.

The Business Council for Co-operatives and Mutuals (BCCM) described the launch as a watershed day for Australia’s most under-recognised business sector.

“Eight in ten Australians is a member of a co-operative or mutually owned business including household brands like NRMA Motoring and Services, HCF, Australian Unity and Australia’s largest member-owned retailer, The Co-op. The level of awareness of co-ops and mutuals and their importance to the economy is much lower,” Melina Morrison, CEO of the BCCM said

“Co-ops and mutuals use a variety of legal structures. Many do choose to set up under state-based co-operative legislation but they have had to deal with a fragmented regulatory system.

“The new Co-operatives National Law which commences in NSW and Victoria from 3 March will reduce regulatory costs and simplify financial reporting. As well, the burden of having to register in multiple jurisdictions in order to do business across state and territory borders, will be removed.

“Businesses set up under companies law have not needed to worry about the cross state trading issue. It is ‘crazy’ and ‘anachronistic’ that co-operatives have had to deal with this commercial constraint.”

“The new laws will provide automatic authorisation to co-operatives wanting to carry on business across state and territory borders,” NSW Minister responsible for cooperatives, Stuart Ayres said.

“This means a reduction in regulatory costs and simplified financial reporting and auditing requirements for smaller co-operatives.”

Victorian Minister, Heidi Victoria said more than 600 co-operatives in NSW and 640 co-operatives in Victoria would benefit from the new law.

“Co-operatives make a big difference to regional and rural communities in particular, fostering stability and prosperity,” she said.

“Laws providing for mutual recognition and consistent compliance at a national level will go a long way to improve the efficiency and viability of co-operatives across the country.”

All states and territories agreed to the new laws when they signed up to the Australian Uniform Co-operative Laws Agreement, with the final jurisdiction signing in February 2012.

The remaining jurisdictions are also working on introducing the new laws in their state or territory.

John Power, the General Manager of the Batlow Fruit Co-operative, has welcomed the introduction of the CNL.

“The burden from the cost of registration in each state has been removed, along with the reduction of red tape,” Power said.

“This is a very good outcome for nationally based co-operatives.”

Power said under the previous state-based system, co-operatives had to handle multiple registrations to enable cross-border trade, with fees payable in each state.

“Now larger co-operatives like Batlow Apples will be able to carry on our business across state and territory borders.”

The Wine Society’s CEO, Peter Wheatley, said the CNL provided scope for more streamlined, less compliance-based operations for co-operatives with a national perspective.

“In today’s world, every commercial organisation – The Wine Society included – must face up to increasingly competitive market pressures to ensure survival,” Wheatley said.

“The rationalisation of regulatory systems is a welcome move, allowing greater focus on achieving operational goals.”

For more information about co-operatives in NSW go to fairtrading.nsw.gov.au

For more information about co-operatives in Victoria go to consumer.vic.gov.au/cooperatives