Chris Ketter (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of the document.

I rise to address the government's response to the Economics References Committee's report on cooperative, mutual and member-owned firms, which was handed down in March of last year. It's always good to reflect on the fact that from time to time we in this place actually do some very worthwhile things, despite everything that you read in the media, and the Senate Economics References Committee's bipartisan report into cooperative, mutual and member-owned firms is an example of that. I was fortunate to take over as chair of the committee from Senator Dastyari during that inquiry. I acknowledge the very fine contributions that were made by Senator McKenzie and former Senator Xenophon during the inquiry. It was a very useful inquiry because it certainly opened my eyes to the contribution that is made to our economy by cooperatives and mutuals—it is very much underrated and not well known. I will talk about that a bit later on. As a result, I have become very passionate about the role that mutuals and co-ops can play in our society. I want to acknowledge my friend the shadow minister for charities and not-for-profits, Dr Leigh, in the other place, who has also been a strong advocate for this sector and I thank him for his support in bringing about Labor's commitments in this area.

In terms of the significance of this committee, I note that the industry organisation representing the sector, the Business Council of Co-operatives and Mutuals, recently issued a report from National Mutual Economy and it talked about the enormous contribution that co-ops and mutual enterprises make to the national economy. Many people would be surprised to know that this sector contributes more to our economy than individually do the construction sector, the mining sector, the manufacturing sector or agriculture. In fact, this sector constitutes 8.3 per cent of Australia's gross domestic product. Despite the fact that these cooperatives and mutual enterprises, or CMEs as they are referred to, are so significant, the sector remains relatively unknown and misunderstood. I can vouch for that in my own case. I was unaware, as I say, of the significance of the sector. It's interesting to note that, whilst 85 per cent of Australian adults are members of at least one cooperative or mutual enterprise, a poll found that only 12 per cent of adult Australians know that they are a member of a cooperative or a mutual. In my own case, I realised on reflection that I was a member of three such organisations—RACQ, Members Equity Bank, or ME Bank, and Australian Unity health insurance. I'm sure a lot of Australians have a vested interest in this sector and that's why the government's response to the report of this committee is so important.

It's important to note that the sector has welcomed, by and large, the government's response to the report and, in particular, the government's moves to facilitate greater access to capital for mutuals and cooperatives and clearly define co-ops and mutuals in the Corporations Act. Both of these issues were addressed in the inquiry report of Mr Hammond OAM, who was given that job by the Treasurer following Labor's lead in adopting the recommendations of the Hammond review. The Business Council of Co-operatives and Mutuals, as I said, has welcomed these developments. The Customer Owned Banking Association, or COBA, have also welcomed these developments. It is important to note that customer-owned banks have a role to play in providing competition in the banking sector. Particularly when the major banks are driven very much by maximising profits and returns to shareholders, we see a lot of cultural issues and misbehaviour. I think it's really important that we have a competitive industry where customer-owned banks, with their unique profit-for-members approach, provide decent competition to the major banks.

Recently—in fact, last week—I was fortunate to be invited to a Business Council of Co-operatives and Mutuals summit in Brisbane and attend their conference dinner. It was pleasing to note that a number of speakers at the dinner, including the retiring chair of Credit Union Australia, Mr Alan Beanland, noted that the work of the Senate Economics References Committee was, in fact, a game changer for the sector in bringing the recognition that was needed in order to get these changes happening. It was, again, very pleasing to see the work of the Senate being held in high regard, in stark contrast to much of what you read about in the media from day to day.

I also want to indicate my overall support for trying to implement these recommendations in a bipartisan fashion. Cooperatives and mutuals shouldn't be a partisan issue. There are many sectors of our economy—for example, agriculture—which have significant cooperatives, so it is good to see bipartisan support in these areas. But I do want to draw attention to a couple of items in the government response. Firstly, recommendation 3 of our report was:

The committee recommends the Commonwealth Government work with states and territories to develop a program of supports to encourage the establishment of new co-operatives and mutual enterprises.

I just want to place on the record my personal disappointment that this was the one recommendation that the government did not agree with. In my view—and I think it is generally a bipartisan view—cooperatives and mutuals are not on a level playing field in many ways. States and territories, as well as the federal government, undertake substantial work in promoting new businesses from time to time, especially small businesses. I don't think we should be shy or reticent about promoting new cooperatives and mutuals, because of the benefits that they bring, particularly in relation to their governance structures. It makes sense that federal, state and territory governments should be working together to make sure that potential new mutuals and co-ops don't face higher barriers than any start-ups for other type of enterprise and that they can access the same type of support. I'm sure that there is more work that can be done in getting cooperation in this area.

I also want to quickly talk about recommendation 10, which was:

The committee recommends that the Commonwealth Government amend the Indigenous Advancement Strategy to allow registered co-operatives the same access to allow levels of grant funding as other entities.

This goes back to my comment that we'd like to see member-owned firms and cooperatives being on the same or equal footing as corporations when it comes to accessing government grants. The clearest example is in relation to the Indigenous Engagement Strategy, which does not allow non-corporations to apply for grants above a certain threshold without special exemptions. Cooperatives are a way for Indigenous collectives to further the goal of self-determination. I note that this is a recommendation that the government noted, so it would be very good to see some further work going on in this respect.

Overall, I think it's fair to say that we do welcome the government's response to this inquiry. It's worth noting that the government has followed Labor's lead in this regard. I'm proud of the fact that it was Dr Andrew Leigh from the other place who late last year announced Labor's inclusive-ownership inclusive-growth package, which promotes ethical competition and productivity—measures which, back then, we were encouraging through the amendment of the Corporations Act to define mutual enterprises, to implement reforms and to facilitate new financial instruments for member-owned firms. One of the great impediments to cooperatives and mutuals is that they don't have a recognised capital-raising instrument, so this is a really important area of work to be done so we can enable cooperatives and mutuals to grow into the future without going down the track of demutualising. It is a great shame when we see that sort of thing happening.

In closing, I'm a big fan of this sector. I remain very excited about the benefits that this sector can bring to our economy. I'm pleased that we are able to give some bipartisanship to this report. I seek leave to continue my remarks later.

Leave granted; debate adjourned.