21 January 2019

Consultation on mutually-owned financial institutions tax changes open


The Morrison Government continues to promote competition in our banking system with today's release of draft regulations to change the tax rules relating to the treatment of certain financial instruments issued by mutually-owned financial institutions.

The draft regulations seek to rectify a current disadvantage experienced by mutually-owned financial institutions (such as building societies and credit unions) compared with other banks. The disadvantage arises as existing rules provide different tax treatment for certain financial instruments issued by banks, compared with similar instruments issued by mutually-owned financial institutions.

This change continues the delivery of the Government's commitment to implement the recommendations of the inquiry into Reforms for Cooperatives, Mutuals and member-owned Firms, conducted by Greg Hammond OAM. These important reforms improve access to capital, remove uncertainties and barriers, enabling cooperatives and mutuals to invest, innovate, grow and compete.

The draft regulations and explanatory material is available on the Treasury website. Interested parties are encouraged to provide their views by 11 February 2019.

Submissions can be emailed to financialservicestax@treasury.gov.au during this period.