Mutual and co-operative enterprises can play a greater role in Australia’s economic future if laws are changed and they are given improved freedom to raise capital in line with other corporate forms, Australian Unity group managing director Rohan Mead says.
Mr Mead welcomed the recently released Senate Economics References Committee report into Co-operative, Mutual and Member-Owned firms as a step in the right direction, supporting a more resilient economy through a diversity of corporate form.
In particular, Mr Mead welcomed recommendation 17, which calls on the federal government to “examine proposals to amend the Corporations Act to provide co-operative and mutual enterprises with a mechanism to enable them access to a broader range of capital raising and investment opportunities.”
“If this change is achieved, mutuals such as Australian Unity will be able to offer a greater range of goods and services,” Mr Mead said.
“In Australian Unity’s case, further investment in the provision of social infrastructure, which is our focus, should also help relieve pressure on governments struggline to meet community needs.
“The report’s recommendations would make the mutual sector more robust, which would in turn support a diversity of corporate form across the economy. This diversity can only aid national economic resilience,” Mr Mead said.
Mr Mead was also pleased to see recommendations in the Senate Committee’s report to explicitly define the term “mutual enterprise” in the Corporations Act, and to define the role of directors of mutuals in the Corporations Regulations.
“This will add certainty and transparency to the commercial arrangements of mutual organisations and level the playing field with other corporate forms.
“All member-based enterprises will appreciate how diligently the Committee delved into the details of the differences between the various member based and shareholder owned organisations and will welcome its fundamental recommendations on improving the knowledge and understanding of the mutual sector throughout the community, but particularly among the legal and accounting professions and the regulatory community.”
Mr Mead said it was important for government to take action to build on the momentum of the Senate Committee’s work.
“We will be pressing government not only to accept the Committee’s recommendations, but to take concrete steps to put them into action,’’ he said.