On 8 November 2017 the Government committed to implementing the recommendations of the inquiry into Reforms for Cooperatives, Mutuals and Member-owned Firms, conducted by Greg Hammond OAM. The Government has today released for public consultation an exposure draft of the Treasury Laws Amendment (2019 Measures No. #) Regulations 2019 and explanatory materials.
The draft regulations propose to rectify the current disadvantage experienced by mutually-owned authorised deposit-taking institutions (ADIs), in comparison to their competitors. This disadvantage arises from the operation of existing tax regulations which treats certain capital instruments convertible into ordinary shares differently from similar capital instruments issued by mutually-owned ADIs. The draft regulations extend the operation of the tax regulation to ensure equivalent treatment between these capital instruments.
The draft regulation forms part of a broader suite of changes following the Hammond review. These changes are designed to improve access to capital, remove uncertainties currently faced by cooperatives and mutual to enable the sector to invest, innovate, grow and compete with investor owned corporations.
Previous consultation has taken place on other measures to implement the Hammond Review recommendations, including:
- Treasury Laws Amendment (Mutual Entities) Bill 2018; and
- Treasury Laws Amendment (Mutual Entities) Bill 2018: Tranche 2
Further details on the draft Regulation are contained in the Explanatory Statement.