Reforms to increase bank competition

RACQ has applauded the Turnball Government for boosting banking competition by backing all 11 recommendations of The Hammond Review to remove archaic restrictions on co-operative and mutual enterprises (CMEs).

The inquiry into Reforms for Cooperatives, Mutuals and Member-owned Firms, conducted by Greg Hammond OAM, highlighted the importance of member-owned organisations to the Australian economy and recognised the unfair restrictions placed on them for more than a century.

RACQ, Queensland’s largest mutual, recently launched a member-owned bank – RACQ Bank.

RACQ Group CEO Ian Gillespie said CMEs played an important role in society reinvesting profits for community gain and serving to constrain competitors’ ability to inflate prices and profits.

“There is a powerful shift globally towards organisations that genuinely look to solve societal problems, benefit the economy and improve community well-being,” Mr Gillespie said.

“However, for far too long CMEs have been hamstrung by outdated legislation failing to recognise their various corporate forms and business models and restricting access to raise much needed capital.”

Mr Gillespie said the reforms were a win for consumers and would lead to increased competition in the banking sector.

“Since launching RACQ Bank we have been overwhelmed by the response as Queenslanders jump at an alternative to profit-driven financial institutions,” he said.

“This is proof of what can be achieved when mutual organisations have access to capital.

“People want a trusted, genuine alternative to the big shareholder-driven banks and today’s announcement will help organisations, like RACQ, offer Australians true competition in the banking sector.”