Bernie Ripoll (Oxley, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Hansard source

It is a pleasure to speak on this motion. I thank the member for Cowper for putting it forward and for his contribution on the matter of cooperatives in this country. The government greatly values the social and economic contribution that cooperatives make to this nation. Cooperatives do some excellent work in our community, and the government does some great things to support them in their work. As the motion notes, the United Nations declared 2012 the International Year of Cooperatives—the IYC—in recognition of the valuable contribution made by cooperatives to global social and economic development. This is a truly valuable contribution, and it operates not only at the global level but also very much on a local and national level.

The national peak body for cooperative businesses, Co-operatives Australia, has argued that the strong performance of member owned enterprises around the world during the global financial crisis has led in Australia to renewed interest in the cooperative business model and the benefits of doing business with a member and community focus. It is a little bit surprising—though maybe it is just a sign of a more sophisticated and complex world—that we drifted away from the cooperative model and the type of business focus that cooperatives have, which is often community based. But it is good to see now that people are once again returning to the cooperative model.

The International Year of Cooperatives provides a fantastic opportunity for Australia's cooperatives to celebrate and promote their work. According to Australia's International Year of Cooperatives Steering Committee, Australia has over 2,000 cooperatives and 113 mutual banking institutions owned by more than eight million people. So there is a very strong cooperative base and a very strong cooperative community, both of which are well supported here in Australia.

Cooperatives are defined by their member-ownership and member focused way of doing business. Former federal Labor Minister for Home Affairs and former New South Wales Attorney-General and minister for cooperatives Bob Debus AM is patron and supporter of the International Year of Cooperatives and has noted that ethical investment and corporate social responsibility are at the very heart of what cooperatives do. Ethical investment and corporate social responsibility are great things, and the former minister did a very good job of promoting them. I am sure that the member for Cowper had corporate social responsibility and social investment in mind when he drafted this motion, and I am sure that he shares this government's strong commitment to promoting them.

Australia's cooperatives operate across a diverse range of industries, including book sales, clubs, cotton growing, dairy produce, fishing, fruit marketing, grain handling and marketing, labour hire, plumbing supplies, property sales, recycling, rural grocery and petrol supplies, sugar milling, taxis, tourism and wine sales. I am sure there are probably one or two others as well. Certainly cooperatives are diverse and significant, and certainly they form part of the basis of a very strong Australian economy.

The former Parliamentary Secretary to the Treasurer and number for Lindsay launched the International Year of Cooperatives on 22 November last year. To celebrate the role that cooperative organisations play in Australia, the government, through the Royal Australian Mint, released a commemorative one-dollar coin in January 2012. One of the goals of the International Year of Cooperatives is to 'encourage governments to establish policies, laws and regulations conducive to the formation, growth and stability of cooperatives'. I look forward to outlining some of the things that this Gillard government is doing to support cooperatives and the good work they do in our community.

The motion notes that some Australian government industry assistance is not available to enterprises with a cooperative structure. Industry assistance programs within the Industry, Innovation, Science, Research and Tertiary Education portfolio do not explicitly exclude cooperatives from eligibility; however, program guidelines sometimes restrict eligibility to incorporated bodies or bodies that are required to pay income tax, as most people would expect. For example, the R&D tax incentive can only assist individuals or bodies which are subject to tax, as entities obviously need to have a tax liability in the first place to benefit from the program. If a particular cooperative is not incorporated or is exempt from paying income tax, it will not be able to access most industry assistance programs. I can understand that most people would think that that is fair, because organisations which are not paying income tax already receive assistance and therefore an incentive.

That said, the government recognises the valuable role that cooperatives play in the Australian economy and is working to ensure that future industry assistance programs do not unreasonably exclude from eligibility business structures of any particular type. In the meantime, the government has introduced a number of key reforms across a range of areas such as not-for-profits, banking and regulation. These reforms will go a long way to assisting cooperatives in the valuable work they do. Most cooperatives are not-for-profit entities, and the government has an ambitious not-for-profit reform agenda which implements the most significant reforms the sector has experienced over the last century.

As of September 2009, there were 1,726 cooperatives registered across Australia—three-quarters of them established as non-profit entities. As part of the 2011-12 budget, the government announced that it would establish a regulator for the not-for-profit sector, the Australian Charities and Not-for-profits Commission—the ACNC. The government released draft legislation to establish the ACNC in late 2011 and has engaged in extensive consultation with the not-for-profit sector. This has included targeted consultation meetings in Sydney and Melbourne, attending ACNC task force road shows across the country and working with the Australian Taxation Office's Clubs Consultative Committee and Charities Consultative Committee and the Not-for-profit Sector Reform Council. Try to say all that in one breath!

While initially only tax-endorsed charities will be regulated by the ACNC, the forthcoming ACNC bill establishes a regulatory framework which can be extended to all not-for-profit entities, including cooperatives, in the future. This will help to cut red tape and reduce regulatory burdens for cooperatives so that they can get on with the important work they do—and of which we are all supportive—such as delivering services to rural and regional communities.

In addition, as part of its Competitive and Sustainable Banking System package, the government is taking action to facilitate the competitive power of Australia's mutual credit unions and building societies. The government has introduced a government-guaranteed deposit symbol which informs consumers that the government guarantees deposits of up to $250,000 with any authorised deposit-taking institution—ADI—such as a credit union, a building society or a bank. Basically it means that the government guarantees that your money is safe. The seal is primarily aimed at supporting smaller institutions, like credit unions and building societies, in accessing and retaining depositor funding. The government's guaranteed deposits seal has been available from 31 January 2012. I am advised that, as of 21 June 2012, 97 ADIs have approached Treasury for information on the seal and 67 ADIs have been provided with the seal for use or display. Related to this, the Financial Claims Scheme applies to all ADIs that are incorporated in Australia and take deposits.

The FCS provides certainty to Australian depositors in credit unions and building societies that their deposits will be protected in the same manner as they would be if they were held by a bank. The government has introduced a new, permanent FCS cap of $250,000 per account holder, per ADI, which has applied since 1 February 2012. This will also help smaller institutions, like credit unions and building societies, by enabling them to demonstrate the safety of most of their deposit products.

As at 21 June 2012, the Australian Prudential Regulation Authority, APRA, has approved the applications of six mutuals, which are now marketing themselves as mutual banks—bankmecu, QT Mutual Bank, Defence Bank, Heritage Bank, Victorian Teachers Mutual Bank and Teachers Mutual Bank—while others are actively considering rebranding. By allowing mutual lenders to market themselves as mutual banks, the government is helping to educate consumers about the safety and competitiveness of mutual lenders. In the end, better competition means better value and better products for consumers, and that drives consumer protection as well.

Finally, I assure the member for Cowper that the government will continue working with the states and territories to implement nationally consistent laws governing the operation of cooperatives. In the past, discussion between the cooperatives sector and regulators about the need for reform of the current cooperatives legislation, including the need for improved consistency and simpler requirements for cross-border operations by cooperatives, led to the development of the Australian Uniform Cooperative Laws Agreement. We have also set up a consumer affairs forum and through that forum the states and territories have agreed also to work towards the introduction of Cooperatives National Law or alternative consistent legislation. While the Commonwealth is not a party to that particular body—we will have no regulatory role under the Cooperatives National Law—there are numerous points of interaction with Commonwealth corporations legislation for which we are responsible.

Once passed, this national legislation will greatly assist cooperatives in the work they do and in making sure they comply. This is why government is encouraging the states and territories to work together to implement this national legislation as a matter of priority. I thank all the speakers who will speak on this motion and support the good work being done by the government.

See this speech in context