Cooperative Business NZ’s submission to Inland Revenue on proposed changes to the taxation of loans made by companies to shareholders, focusing on the potential unintended impacts for co-operatives and mutuals and the need to recognise member-owned ownership models.

The submission supported the overall direction of the proposed rules, particularly the emphasis on public value and economic benefit. It encouraged stronger recognition of how ownership and business structure influence outcomes, and recommended measures to ensure cooperatives and other New Zealand-owned enterprises have fair access to procurement opportunities. 

The submission outlined the view that existing tax concessions for friendly societies and credit unions recognise their unique structure and purpose, and support their ability to reinvest surpluses for the benefit of members and communities. It noted that removing these concessions could increase costs, reduce accessibility, and undermine the social and economic role these organisations play. 

The submission supported the intent of improving director privacy and safety, but argued that access to alternative service addresses should be available as of right. It recommended removing the requirement for directors to demonstrate harm or complete additional procedural steps in order to protect their personal address information.  

The briefing sought to support early engagement between the incoming Government and the cooperative business community, and to encourage consideration of policy and regulatory settings that are fit for purpose for member-owned enterprises operating across multiple sectors. 

The submission supported the intent of improving transparency in business payment practices, but raised concerns that the proposed regime could create unintended consequences for cooperatives and their members. It recommended refining the coverage and reporting requirements to better target third-party payments and reduce unnecessary duplication and compliance costs. 

The submission encouraged the Commerce Commission to consider the distinct characteristics of cooperative enterprises when finalising recommendations, and to recognise the role cooperatives play in supporting competition, community outcomes, and long-term economic resilience. 

The briefing sought to broaden the Commission’s analytical lens by incorporating cooperative and mutual enterprises into discussions of productivity and frontier firm performance. It also encouraged deeper engagement with international cooperative standards and New Zealand’s own cooperative history. 

The briefing aimed to support early dialogue between government and the cooperative sector, and to highlight how cooperative and mutual businesses could contribute to economic recovery, resilience, and long-term wellbeing. 

The submission supported renewal of the Small Cooperatives Exemption Notice and recommended deferring substantive changes to allow for fuller consultation. It emphasised that exemptions play a critical role in enabling cooperative formation while preserving investor protections appropriate to member-owned enterprises.