Welcome to the electorate of Reid. It is my honour to be here with the Treasurer who will say some words shortly and Senator McKenzie who has done invaluable work on this topic today. Put simply, and very quickly, the measures today are important, as both the federal member for this seat, because it works for all the community. Eight out of 10 Australians are involved in cooperatives of some way, shape or form. So, the reach will be far and wide. But as the Assistant Minister for Industry, Innovation and Science I am particularly interested in additional competition in the lending space on the business side of the fence. The more competition we can have, the better the outcomes for the customer and the more people who will be, we hope, starting businesses and employing locals back in our local communities. These associations, like CUA, are a great example of that interaction in our local community. Treasurer, congratulations on what you are announcing today. We look forward to hearing all about it.
Thanks very much Craig. It is great to be here with you and Senator McKenzie. Can I also acknowledge Melina Morrison who is here and represents the mutuals and co-ops sector and Wendy Machin is here as well and she represents the Customer Owned Banking Association. It's great to be here at CUA as well, a great example of one of the many mutuals, co-ops and customer owned banking organisations that exist around the country. Can I also acknowledge Greg Hammond. Greg Hammond I asked some months ago to undertake a review into the mutuals, co-ops and member owned firms sector. That came off the back of some great work that Senator McKenzie did in really putting this issue on the agenda.
We love our mutuals, co-ops, customer-owned organisations. They are a big part of Australia's history actually. They represent some 10 per cent of home loans in the country. They represent, on the latest figures, a combined membership, so there are obviously double-up memberships here, of some 29 million memberships around the country. The top 100 have some $30.5 billion in turnover and they have assets of around $144 billion. This is a big sector and importantly it is owned by you. It is owned by Australians. It is a predominantly Australian owned sector that is populated by these member-owned organisations. What is great about these organisations is, whether it is here at CUA in Burwood or out in rural and regional parts of the country which Bridget knows well, these are organisations that are part of the fabric of local communities, have been started by local communities and some have gone onto incredible scale.
One of the problems is in order to compete with the big boys, they often have to de-mutalise to get access to capital and to be able to provide the competition that they want to provide for their owners which are their members, which are ordinary, everyday mums and dads and Australians all around the country. So, in asking Greg Hammond who is a well-respected adviser in this field and has worked in this sector for many years, he has gone out and he has spoken to people right across the sector. He has spoken to the regulators, he has spoken to officials as much as he has spoken to those who work in the sector. He has been able to identify some of the key things that are holding this sector back and they are their ability to access capital. The fact that the mutuals sector has become an orphan effectively under our legislation, an orphan under the way that regulators operate. They are there but not seen, not heard. It is important that we change that.
Today is about recognising that coops and mutuals, customer owned banking, member-owned organisations play a huge role in our economy, a huge role in communities and the Turnbull Government wants to protect it, enshrine it, celebrate it and see it grow. Why? Because it is good for the customer. It is good for competition. It is good for the people who own these organisations, which is Australians and it is good at the end of the day for our economy because it means there is more competition in banking. There is more competition in private health insurance. There is more competition in agricultural production and what occurs in that sector. So, this is an important and growing sector and I want to remove the shackles from its ability to grow and compete and to do that they need to be able to play on the same field that the big banks do and that other big companies do. That means that they can get access to capital.
So, on the recommendations, I want to thank Greg very much for the excellent work that he has done because what we are adopting today in accepting all of Greg's recommendations is that we will be going forward to give that recognition, that legislative recognition to the mutuals sector and the co-op sector and to ensure that the shackles that are on them in terms of capital raising are lifted.
Now, there is still a lot of work to go. There is legislation now to be consulted on and drafted. That needs to pass through the Parliament and Craig and I will be doing our bit in the House and Senator McKenzie will be doing her bit in the Senate. But I would hope this is something that the Parliament should embrace. We will consult extensively on that legislation and I would like to see it come to a place and come into effect if at all possible by the second half of next year. That would be great to see and I think that really does set the challenge for the Parliament, as well as my team of officials at Treasury to get this done, to get it consulted and get it into the Parliament and ensure that members, customers, businesses all of those who depend on this sector and thrive as a result of this sector will be able to do so more so into the future.
Now, I am going to ask Melina, if that ok, I know this is something that you have been working with us on for some time and particularly Greg. Melina Morrison from the mutuals and co-ops sector.
Thank you very much Treasurer. Well, today there are 2,000 businesses across the country that welcome and usher in these announcements. It is a ground-breaking change in the recognition for businesses that are owned by eight in ten Australians. Some 15 million members, 29 million memberships because so many of us have co-ownership of these businesses in roadside assistance, in health mutuals, in agriculture, in customer owned banks. We really see this as the Federal Government showing that it is committed to long termism, to social responsibility, to businesses that are domestically owned, they are taxed domestically, this is a bulwark against inequality because Australians through these announced measures, will be able to invest in the long term in the businesses that are here for them in their communities. We see this as a step change and greatly welcomed and look forward to the soonest implementation so that on behalf of our customer owners, our member owners we can get in and start investing from the inside out in our economy and keep that economy growing within the Australian domestic scene. So, thank you very much on behalf of everyone.
SENATOR BRIDGET McKENZIE:
Well, don't ever let anyone tell you that Senate inquiries don't make a difference. It was a few years ago that I put forward a terms of reference into the Senate to actually look at this sector, underappreciated and as the Treasurer announced, the orphan of corporate structures in Australia, treated differently, not recognised, the ATO and a whole range of government agencies at a state and federal level not actually treating cooperatives and mutuals the same way they treated any other business. They weren't seen as commercial entities when the facts are just not true. As we know eight out of 10 Australians whether you are NRMA, RACV, your local customer-owned banking or for me as a National Party Senator, cooperatives and their structures have really allowed our producers, right throughout our history as a nation to band together and to have some real market power when it comes to their product. Look at CBH, what a great story that is and just look across the ditch at Fonterra. If you want to know the power of a cooperative of member ownership within the agricultural sector this is the model that delivers for producers on the ground.
So, I am incredibly proud to be part of a government that has delivered on that promise that seeks to open and make it clear that the cooperatives sector needs to be recognised in the Corporations Act and I am looking forward to bringing down those measures so that we can watch this sector grow and develop well into the future. Thank you Treasurer.
Thanks Bridget. Why don't we start with questions on this report and then if there are other matters which you want to raise we will deal with those separately. So, why don't we start with mutuals? Just stressing again that this is part of a broader package of reforms, changes we're introducing to make particularly our banking system more accountable, more competitive, importantly, and stronger. So this only serves to further strengthen our financial system in particular through these changes to mutuals and cooperatives and it is all part of our plan for a more accountable, more competitive and stronger banking and financial system which means one thing: it's fairer, too. Okay, questions?
Are you expecting much pushback from the big banks on this?
Well, what the big banks do is really up to them. What I'm expecting is the mutuals and cooperatives sector to push forward and if that means the big banks push back, well, so be it. But that's what competition is and what we're seeking to do here is put more power in the arm of mutuals and cooperatives and customer-owned banks to be even more competitive in the sector. As I said, 10 per cent of home loans are held by this sector and I just want to see more competition in banking and financial services. It is one of the reasons why we've been pushing through so many other changes in this area, particularly on financial technology and the things I announced last week about comprehensive credit reporting, and the information that then allows smaller organisations including the ones we are talking about today, to be more competitive, accessing that information which enables them to give better products at lower prices to customers.
How confident are you that the changes will happen?
I'm very confident. This is good, common-sense policy which is good for the economy, good particularly for regions of Australia where the meshing of cooperatives and mutuals into the fabric of those communities is incredibly strong. The people who sit on the directorships and boards of these organisations are the local pharmacists, the doyens of the community. But it's also true here, isn't, it Craig?
I know down in my neck of the woods in the Shire, we have the same organisations who play an incredible role in our local community and we want to see them stronger. So I'm confident and anyone who wants to stand in the way of this is standing in the way of a better deal for customers and a better deal for the owners of these organisations and the communities they serve.
Okay, well, it sounds like you want to talk about something else as well. What I might do then, just before we move to those other topics, another topic I wanted to bring up today is that you would have seen the report, Treasury is releasing a study that they have done themselves on their own initiative which highlights that our Enterprise Tax Plan will return back to taxpayers some 45 cents in every dollar of the tax cuts that we will give to companies that will enable them to compete more effectively globally, to invest more, to create more jobs and to grow our economy and that includes eight cents that goes back to the states and territories in every dollar of those tax cuts that we give. Eight cents will go back to states and territories to support schools and hospitals and law enforcement. The other point that the report makes very clearly is that if we don't do this, if the Labor party, if Bill Shorten continues to stand in the way of the growth and the jobs and the investment that comes from our Enterprise Tax Plan, then he will be responsible for seeing investment and jobs go offshore. We will be stranded on a Shorten tax island of uncompetitiveness for business. That is not a plan to grow the economy, that is a plan to put our economy into reverse. That's the risk of what Bill Shorten is offering – $150 billion in more and higher taxes, and that means that Australian businesses will be less able to compete, including the businesses we are here talking about today.
Will the Coalition be willing to reduce the 21 day timeframe for MPs to produce their citizenship documents?
Look, I think what the Prime Minister has announced is a very sensible timeframe. It is actually shorter than the normal timeframe that applies to disclosure of members' interests, and that was done in recognition of the stage we're at this time of the year. The Prime Minister is talking to the Leader of the Opposition today about these things so I think I will leave it to them to finally resolve that issue. But I think the Prime Minister has put forward a very common-sense proposal to deal with an issue that is not of the Government's making, an issue that technically would have been present since the Citizenship Act itself was introduced. So this is technically not a new issue, but it has come to light over the course of this Parliament and the Prime Minister is working to deal constructively and effectively to bring some certainty to this issue. But what we must be careful of is not to be distracted by this. Who people's parents or grandparents are is not the reason that we need to act on petrol prices and electricity prices or on any of the issues that are affecting households across the country. It's not got anything to do with why we need to take action now in making sure our banking system is more accountable and fairer. We need to keep focusing on the issues that are growing jobs in this country. We have the strongest full-time jobs growth in the last year in the last 40 years on record, and that's great news for Australians, and we need to keep on doing that and that's what we will keep focused on. We need to deal with this citizenship issue. The Prime Minister has a common-sense process for dealing with it, but I can assure you that our team is not taking our eye off the ball and that ball is jobs and growth and investment because that's what lifts people's living standards.
Labor wants the new disclosure rules fast-tracked. Isn't it reasonable to clarify the issue before Christmas to restore public confidence?
As I said, the Prime Minister and the Leader of the Opposition are meeting today. They will discuss what they need to do. What I would hope is that we might see a different approach from the Labor party today. What we've seen from the Labor party is an attempt just to create uncertainty, to create disruption to create uncertainty, and I don't think that's a very constructive way to deal with an issue that would have been as much in existence under the Rudd-Gillard-Rudd years as it has now presented itself and indeed for many governments prior to that. So I think it requires people to get together in good faith and to work to create certainty in an area where there has been a lot of confusion and I would say that I don't think the Australian public will take kindly to an opposition seeking to be opportunists on this.
Cory Bernardi says the citizenship scandal should force a delay in legalising same-sex marriage if the 'yes' vote prevails. How confident are you that you can get through legislation amid this scandal?
Well, I just take these things one step at a time and the next step is that there will be the results of the marriage law survey. I think the reaction to the marriage law survey has been unprecedented. We're looking at around four in five Australians who were eligible to vote participating. Remember, this is a survey which the Labor party said shouldn't be done, couldn't be done and would not have any credibility. They said it was going to produce all manner of mayhem which did not eventuate, and what we have is four out of five Australians actually having their say, which is what we went to the last election and offered and promised the Australian people. They've had their say. There's a few more days to go. We'll have those results next week and then the Parliament will deal with the outcome of that process. But I'm not prejudging the outcome of the process. I'm waiting to see what those results are next week and then the Parliament will take action based on what the outcomes are.
You said earlier that the Government has other priorities. Will the Coalition consider referring Susan Lamb and Justine Keay to the High Court given the questions that have arisen around when they renounced their dual citizenships?
Well, we have a process that we've put forward so we will just run that process and not be distracted in the meantime or indeed after that point. There are important pieces of legislation that still have to be dealt with this year. In the Senate next week, I would hope, the Labor party will be asked to support a tax cut for first home buyers. What I put in the Budget will enable first home buyers to be able to save 30 per cent faster because of the tax cuts we are giving them on their first home deposit savings. Now, the Labor party has said they are going to vote no to that. So we've been working constructively with the crossbench to get support for that bill, and that's a matter that will be resolved in the Senate ultimately. But that's an important piece of legislation. I can guarantee you, if you're saving right now for your first home, then you are far more interested in making sure the Parliament legislates to give you a tax cut on your first home savings than who my parents are or anyone else's parents are and I think that gives the issue some focus. Certainly we have to deal with it and the Prime Minister is, but let's keep some focus here. What matters to first home buyers is they get their tax cut for their first home deposit savings. We want to give it to them. Bill Shorten wants to deny them that and that matter will be determined in the Senate. That's a matter that I am hopeful that the Senate will see the wisdom of that measure, the fairness of that measure, and they will tell first home buyers all around the country that they are going to back the Government's plan to give them a tax cut. Okay, thanks very much.