Australian apex body urges government to boost role of co-ops and mutuals

BCCM chief executive Melina Morrison says the co-op model could provide more stable, efficient services but has been ‘sidelined’ for 35 years

The Australian Business Council for Co-operatives and Mutuals (BCCM) has called on the government to give co-ops a greater role in delivering services, in its response to the federal budget.

“For the last 35 years, the co-operative business model has been sidelined by bureaucracies and policies designed to entrench the company business model as the ‘mature’ option,” said BCCM chief executive, Melina Morrison.

“Yet co-operatives and mutuals are still a fundamental part of the Australian economy. 79% of the Australian population are member shareholders compared with 36% of Australians that own listed investments on the Australian Stock Exchange.”

She added: “With some minor changes in government thinking, the inherent stability and customer-focused nature of the co-operative/mutual model can continue to deliver services cost effectively and with tremendous community benefits.”

But BCCM welcomed some measures mentioned in the budget that could make it easier to register a co-operative or mutual in Australia.

“We’re heartened by almost $400m to simplify business registrations and remove regulatory restrictions on small businesses and competition,” said Ms Morrison.

“Most government business websites around Australia fail to even mention co-ops as a business model. This is clearly unacceptable and we look forward to working with the States and Commonwealth in improving the information available.”

Related: Australian mutuals report progress over bid to change laws on working capital

Another measure welcomed by the BCCM is the decision to measure the efficiency of agreements reached within the Council of Australian Governments (COAG), such as 2012’s Co-operatives National Law, designed to harmonise the state-based regulatory frameworks for co-ops.

But it believes the government failed in its approach to banking competition. Ms Morrison pointed out that the Australian financial market already had around 80 challenger Authorised Deposit-taking Institutions (ADIs).

“Making it easier for new entrants doesn’t help the existing competition which already holds around 10% of the country’s mortgage market.”

She suggested that the government should also express support for competition already existing in the market place.

BCCM also welcomed the announcement a $472m investment in regional infrastructure projects via the Regional Growth Fund, which, it argues, could provide opportunities for regionally based co-operatives and community-owned infrastructure projects.

In terms of housing, the budget mentions forming a National Housing Finance and Investment Corporation to facilitate community housing expansion, which could represent an opportunity for the development of co-operative housing. Tax incentives for managed Investment Trusts that invest in affordable housing is another measure announced in the budged, which could contribute to an expansion in co-operative housing.

“We look forward to working with States and the Commonwealth in the creation of a more diverse housing market,” added Ms Morrisson.

BCCM also highlighted that many small businesses were members of co-operatives, such as the 17,000 mechanics and crash repairer members of Capricorn Group, a buying co-op. The apex body is in favour of providing assistance to small businesses, through a continued $20,000 capital write-off, and small business company tax cuts, both measures announced in the budget.

The federal government also announced full funding for initiatives part of the National Disability Scheme. BCCM highlighted that the new national NDSI Quality and Safeguards Commission could achieve its goals of promoting participant choice and control by ensuring an enabling environment for consumer-owned and employee owned service providers.

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