The real reason why Australia is becoming more corrupt


Australia is becoming more corrupt, the latest Transparency International corruption perceptions index has revealed.

But it’s not due to more instances of corruption – it’s because we’re unwilling to address it when it happens.

Australia hasn’t actually fallen in rank on the Transparency International Corruption Perception Index (CPI) (13 out of 180, where 180 is the most corrupt), but it has been listed as ‘declining’ along with Chile, Turkey and Mexico.

“This kind of decline only happens when there is a climate of tolerance of certain corrupt behaviours,” the Diplomatic Corps of Spain’s José-Miguel Bello y Villarino said in a piece for the Australian Institute of International Affairs.

“In terms of CPI scores, it may matter less the absolute number of corrupt practices than the lack of adequate response when these are revealed.”

He said New Zealand, which is ranked second out of 180 countries, is a good example of this. The Kiwi nation provides detailed information of all fraud reported, as well as the motives behind the instances.

Australia – not so much.

“Experts may have noticed a lack of political will to take certain final steps,” Bello y Villarino said.

Unfortunately, it isn’t hard to think of examples of this.

The Royal Commission

The Royal Commission – a 14 month examination of Australia’s trillion dollar financial services sector – have aired stories equal parts disturbing yet unsurprising.

As the Ethics Centre director Simon Longstaff noted at a recent event, the major inquiry just confirmed what a lot of Australians already suspected.

And it’s seen several high-profile heads roll, with the most recent case being NAB CEO Andrew Thorburn and and Chairman Ken Henry.

But Australia’s leaders and media both opposed the Royal Commission.

Prime Minister Scott Morrison called it a “populist whinge” and voted against it 26 times. Three days ago he told a press conference: “Let me be frank, I called for the royal commission.”

Former Prime Minister Malcolm Turnbull also opposed the Royal Commission for more than 18 months, arguing it wouldn’t provide any solutions as Royal Commissions have limited power to actually take action.

“I can tell you we have, as a government, decided not to have a royal commission; we made the decision a long time ago, not because we don’t believe there is nothing going on in terms of problems with the banks, it is because we want to take action right now and we are,” Turnbull told Seven, claiming that the government’s new financial complaints authority would be more effective.

Financial Services Minister Kelly O’Dwyer also said in a scathing opinion piece in 2016 that a “Royal Commission just won’t work”.

While acknowledging “unacceptable” misconduct, she said Labor’s call to establish a Royal Commission would be “reckless and ill-conceived”.

“Critically, a Royal Commission would go over old ground and would delay well-developed and important reforms, such as lifting the professional standards for advisers,” O’Dwyer wrote at the time.

“A Royal Commission would send the signal internationally that the Government believes there are structural problems with our banking and financial system and could lead to significant repercussions for confidence, international investment, and our AAA credit rating.”

Both have now admitted they were wrong to block the Royal Commission.

But it wasn’t just politicians

Parts of the media industry also rejected it, with commercial radio host Ross Greenwood describing it as a “complete waste of time”.

He said it would be a Royal Commission about “nothing that we don’t already know”.

But Greenwood later backflipped on his comments. “As it turns out, the major banks and financial institutions treated the regulators as a speed bump, almost like a business partner that they would negotiate with and cut a deal with,” he told Nine.

“They deliberately sought to mislead the regulators, and that’s what was the most astonishing and gobsmacking to me … It’s so important that the commission happened.”

The Australian’s Judith Sloan also admitted that, after arguing there was “no case for a Royal Commission into banking”, the revelations proved “we have been misled. It’s much worse.”

Lack of strong corruption body a major factor

A former judge sounded the alarm on Australia’s tolerance of corruption late last year.

Former Court of Appeals justice at the Supreme Court of Victoria, David Harper said the lack of a federal anti-corruption agency is a major factor in this complacency.

“In NSW, Victoria, Western Australia and Queensland, extraordinarily serious instances of corruption have been unearthed by royal commissions or broad-based anti-corruption authorities,” he said in an opinion piece for The Sydney Morning Herald.

“A survey by the Victorian Independent Broad-based Anti-corruption Commission (IBAC) found that 40 per cent of past, present and prospective suppliers to government agencies believed corruption in public sector procurement to be either a major or moderate problem.”

Bello y Villarino agreed.

“The establishment of the toothless federal anti-corruption watchdog announced last December will not change much on this front, but will at least be a sign of increased interest in the issue,” Bello y Villarino said.

“As the CEO of Transparency International Australia mentioned last week … there may be a window of opportunity now to change the perception that Australian politicians do not care much about corruption.

“Let’s hope this is the case.”

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