Co-operatives and mutuals are expected to drive competitiveness and productivity as the Australian economy enters uncharted waters.
The Australian Senate has referred the role, importance, and overall performance of co-operative, mutual and member-owned firms in the Australian economy for inquiry and report by 14 May 2015.
Business Council of Co-operatives and Mutuals chief executive, Melina Morrison, said that ‘Budget time’ was the right time to be talking about the contribution of the sector, said to be worth 7 per cent of GDP.
“The Australian economy is facing major challenges with productivity, competitiveness and resilience which co-operatives and mutuals have the potential to help overcome,” Ms Morrison said.
Eight out of 10 Australians are members of a co-operative or mutually-owned business and there are 13.5 million members of these, almost double the number of Australians investing in ASX-listed companies, she said.
Promoting the growth of businesses that are member-owned or owned to benefit members instead of shareholders is one way to tackle the shifting of profits out of the economy, Ms Morrison argued, without the need for “a big regulatory stick” since 100 per cent of profits are reinvested in Australia.
“We’re not listed, so in troubled economic times co-ops provide for greater security and stability in the economy,” she said.
“We are ‘sticky money’. What we earn we keep here to invest in Australia’s future. It is a matter of common sense for governments to promote the growth of co-operatives in the economy.”
The Senate inquiry was jointly proposed by Victorian Nationals Senator Bridget McKenzie and South Australian independent Senator Nick Xenophon.
The inquiry’s terms of reference call for a focus on the economic contribution co-ops and mutuals make to the national economy as well as current barriers to innovation, growth and free competition.
The inquiry will also look at the impact of current regulations, comparisons between mutual ownership and private sale of publicly held assets and services, and any related matters.