Three of the state’s biggest associations – HBF, RAC and St John of God Health Care – and lawyers Jackson McDonald have expressed concern about proposed legislation governing associations in Western Australia.
Three of the state’s biggest associations – health insurance fund HBF, motor vehicle insurance provider RAC and health care organisation St John of God Health Care – and lawyers Jackson McDonald have expressed concern about proposed legislation governing associations in Western Australia.
One of the main issues for large associations is the policy surrounding transfer of incorporation, which could potentially force demutualisations.
Under the proposed bill, the Commissioner for Consumer Protection would have “the power to direct a large or complex association…to apply for incorporation under some other more appropriate legislation’’, such as the federal Corporations Act.
The organisations have provided submissions to the Department of Consumer and Employment Protection outlining concerns with a proposed bill, which intends to bring WA in line with eastern states legislation, among other objectives.
In its submission, St John of God Health Care called for more detail and flexibility surrounding the transfer requirement.
St John of God Health Care corporate solicitor Joe O’Halloran said greater clarity was needed about the grounds on which an association could be required to transfer its incorporation.
“There should be a clear provision that on any transfer of incorporation, an association would not be liable for stamp duty,’’ he said.
This was echoed by Jackson McDonald’s submission, which questioned whether the criteria was relevant, given that accountability and transparency would be increased by the legislation through increased auditing and reporting duties.
The firm proposed that an association should only be required to transfer its incorporation if it sought to distribute funds to members, or engage in activities outside the legislation.
It also stated that, for large associations, transfer of incorporation could result in demutualisation in some circumstances, and could result in WA losing the benefits that membership-based associations provided.
HBF group legal counsel Andrew Raiter said the provision was the main concern for the organisation.
“We felt that essentially there needed to be more criteria around the key definitions in the document, particularly around the size and nature of the organisation,’’ he said.
Mr Raiter said while HBF was not concerned about the prospect of moving under different legislation, as it believed its governance and regulatory structures were in line with existing requirements, the organisation would prefer to remain under the current regime.
“We are focused on our current status – obviously the regulatory environment is changing and will change. If we need to consider a transfer, that will be something the board and senior management will look at,’’ he said.
RAC legal officer Pam Robinson said the organisation’s submission addressed the issue of transferring incorporation from state to commonwealth legislation.
“If this is possibly going to happen, let’s all be sure what the process is and the criteria are," she said.
“We are a WA member-based organisation and we feel we should be regulated by a WA department under WA conditions.’’
Ms Robinson said there were other concerns, including the role of the public officer.
St John of God Health Care also raised the issue in its submission, declaring the obligations on a public officer to be inappropriate.
In addition, the organisation opposed the compulsory lodging of an annual return, stating that it should be sufficient for an organisation to present its accounts at an annual general meeting.
