Co-Ops and Mutuals Look to Compete With Big Business
26 October 2018 at 5:15 pm
Cooperatives and mutuals will be better equipped to raise money and compete with the big banks and other investor-owned businesses under proposed new laws.
The legislation, announced by Federal Treasurer Josh Frydenberg and the Assistant Treasury and Finance Minister Senator Zed Seselja on Tuesday, would better define mutual companies and help co-ops and mutuals raise capital in the same way investor-owned corporations can, without sacrificing their member-owned structure.
Melina Morrison, CEO of the Business Council of Cooperatives and Mutuals (BCCM), told Pro Bono News these changes would benefit the Australian community as a whole, and promote corporate diversity.
“It facilitates choice and competition in markets where there’s a lot of concentration of investor-owned corporations, which by their very nature have to serve their shareholders over other stakeholders,” Morrison said.
“Australians want to be able to get their products and services from organisations that are trusted, have an ethical outlook and are domestically owned. These are all characteristics of cooperatives and mutuals.
“And what these changes will mean, in terms of the social development of Australia, is that we genuinely will be able to have a range of organisations that can compete in all of these different markets.”
“New legislation is needed to make the Australian Corporations Act work better for mutually owned businesses, so that they can compete on a level playing field with other types of firms." Melina Morrison, CEO BCCM pic.twitter.com/cOzGblUZak
— BCCM (@BCCM_AU) October 23, 2018
BCCM’s Morrison said making sure the legislation passed was her immediate priority, but added her long-term goal was to see ownership in the economy spread more equitably by encouraging the growth of member-owned organisations in every part of the economy.
“It’s all about giving more people a chance to have skin in the game in the Australian economy,” she said.
Rohan Mead, CEO of insurance company Australian Unity, said mutuals have played an important part in Australian society for close to 200 years – through essential services including banking, health services and retirement living.
He said these changes were especially important as Australia’s population was aging and the nation faced a significant shortfall in social infrastructure.
“A report we commissioned this year from PwC highlights that by 2025 we will need at least an additional $37 billion in funding to build and provide health, aged care, housing, disability care and other social services facilities for the population,” Mead said.
“Access to new forms of capital will mean that mutuals, which are able to take a patient, long term view, can play a key role in helping address these looming challenges.”