Northern Territory Second Reading Speeches Northern Territory Second Reading Speeches[Index] [Search] [Bill] [Help]
| Madam Speaker, I move that the bill be now read a second time. The purpose of this bill is to adopt a new national uniform template legislation for the regulation of cooperatives in all states and Territories as provided for in the Australian Uniform Cooperative Laws Agreement. The main purpose of this bill is to enable the uniform cooperatives national law and the national regulations to be applied in the Northern Territory. The law is set out in the appendix to the bill. The law will apply to the non-banking cooperatives which are also known as general cooperatives. The banking cooperatives, sometimes called financial cooperatives, such as credit unions, building societies and friendly societies are regulated under separate legislation administered by the Australian Prudential Regulation Authority. Cooperatives are mutual organisations and they continue to be a significant part of the Australian and world economies. There are approximately 1700 registered cooperatives in Australia. About three-quarters of cooperatives are established as not for profit, in that they have rules that prevent them from distributing any surplus to their members. These cooperatives may provide crucial services to their members such as health and medical care, job searching, training, housing or childcare. Cooperatives are known for their distinctive member-owned, member-controlled and member-used focus. They provide an organisational structure for individuals and small businesses by which they can acquire goods and services in economies that are increasingly dominated by large corporate organisations. The Northern Territory currently has four cooperatives. Cooperatives are also important in rural communities where they enable those communities to retain and develop services that have been eroded by the withdrawal of other corporate businesses which seek to maximise profits for investors and so relocate elsewhere for bigger profits. Investor oriented firms, member oriented cooperatives and other types of organisations all have a role to play in providing services in a modern and balanced economy. Governments continue to have a role in providing a legislative framework to assist with the operation of cooperatives and other forms of organisations. The Northern Territory, as part of the Australian Uniform Cooperative Laws Agreement, continues to promote the principles of cooperatives through implementation of cooperatives national law. This legislation will continue to enable the formation, registration and operation of cooperatives, promotion of cooperative principles and protection of the interests of cooperatives, their members and the public in the operations and activities of cooperatives. The Cooperatives National Law introduces a number of reforms. Importantly it will ensure consistency of laws across all jurisdictions. This will be achieved by jurisdictions either directly applying the uniform template Cooperatives National Law, or making their own legislation consistent with that law. All jurisdictions will use their best endeavours to administer the Cooperatives National Law uniformity in line with the agreement. This improvement in the consistency and administration of cooperatives laws will provide greater certainty for all parties with rights, duties and powers in relation to cooperatives, and assist in lowering costs and red tape through cross-border operations. Automatic mutual recognition of cooperatives by other jurisdictions once they are registered in one jurisdiction will facilitate cooperatives conducting operations across state and territory borders. Currently a cooperative needs to apply separately to each jurisdiction in which it wishes to operate. If a trading cooperative wishes to operate in all states and Territories it would pay an average of about $1700 in registration and compliance fees to do so, as well as having to lodge reports annually to those jurisdictions. By comparison the corresponding fee for a company registered under the Corporations Act is about $450. Under the Cooperatives National Law, costs will be lowered and paperwork requirements simplified which is similar to a company requirement in this context. Simplification of the financial reporting and auditing requirements for small cooperatives, by using a risk assessment-based system, will reduce costs and red tape for those cooperatives. Responsibilities and duties for directors and officers of a cooperative have been updated and made consistent with those requirements applying to directors and officers under the Corporations Act. This will mean that directors and officers in similar circumstances in a cooperative will be treated similarly to those in a company. Director liability for corporate fault under the cooperatives national law has been revised according to the Council of Australian Government’s director liability reform. As a result, blanket liability provisions have been removed and directors face liability where there is a clear link between the director’s responsibility and action or inaction and the contravention of the law. More flexibility for a cooperative to raise funds from both members and the public has been created by the introduction of the option to use cooperative capital units by cooperatives in all jurisdictions. To save reinventing the wheel, cooperative laws have for some time referenced the Corporations Act where appropriate, for example, in dealing with disclosure of information for fundraising from the public, insolvency, liquidation and winding-up situations. The referencing of the Corporations Act has been updated and made consistent across all jurisdictions. The introduction of enforceable undertakings is a cost-effective method of facilitating compliance with the law. For example, the registrar may accept a written undertaking from a cooperative to take action to prevent contravention of the law. This can be reinforced with a court order applied for by the registrar provided there is agreement from the cooperative. The adoption bill and the law have been approved by all states and territories via the Council of Australian Government’s Consumer Affairs Forum out-of-session process. With these milestones having been met, it is now timely for the bill and law to be considered by this Chamber in keeping with the terms of the agreement. The Australian Uniform Cooperative Laws Agreement requires states and territories to secure the passage and proclamation of their laws by 18 May 2015. I commend the implementation and ongoing uniform administration of this national template cooperatives legislation for the benefit of all in the cooperatives sector and for the future development of business in the Northern Territory. I commend the bill to the House. Debate adjourned. |