Australia is in the midst of moral and ethical decline

CHALLENGE: Steve Smith and other Australian leaders have really let the people down in recent years. Picture: AAP Image/Paul Braven
CHALLENGE: Steve Smith and other Australian leaders have really let the people down in recent years. Picture: AAP Image/Paul Braven

Much is said these days about the so-called “trust deficit” – not just in the form of a loss of confidence in our politicians and our political process, but more broadly across a range of institutions that are fundamental to a functioning democracy, where trust had basically been taken as undeniable, essentially as a given.

We hear of it in terms of churches, banks (and more broadly in business), various sports, the RSL and numerous authorities ranging from the police and judicial processes through to a host of regulatory authorities (energy, competition, migration/refugees, ASIC/APRA and even the Reserve Bank) that seem to have dropped the ball, lost their focus and way.

This hasn’t just happened all of a sudden but has been the result of a much longer-term erosion of the moral and ethical standards across society, as well as their application and enforcement.

Two conspicuous examples in recent years have been in banking and cricket.

The Hayne Royal Commission into banking has focused on the significance of greed as a culture in banking.

Banks have generally abused the social licence under which they operate, driven by the desire to maximise profits and therefore returns to their shareholders, which they have done by effectively neglecting the interests of other stakeholders – especially their customers but also employees, suppliers and the broader community.

The boards of these banks have been very slow to recognise, and correct, their ultimate responsibilities in setting and enforcing this culture of greed.

They sign off on the banking strategy, they appoint the chief executive to implement the strategy and hold them accountable for that implementation. And they sign off on the remuneration structures in support of that strategy.

Most Australians have a very refined sense of what is good and bad, and what is right and wrong. They have every reason to expect our leaders, at all levels of our society, to lead on these moral and ethical standards.

If bank management and employees are encouraged (including via remuneration) to maximise profit above all else, don’t be surprised where they go, and to what extremes they will go, to achieve that objective.

As Hayne also points out, regulatory authorities have been slow to recognise and enforce appropriate standards, including some that would otherwise perhaps attract criminal penalties. However, a fish rots from the head – the bank boards have been negligent in recognising and enforcing moral and ethical standards.

In cricket, the ball tampering scandal has dominated most recent discussion. This was the outcome of a “win at all costs” culture in the Australian team.

Two key perpetrators, Cameron Bancroft and Steve Smith, recently did extensive interviews with cricket great Adam Gilchrist.

While the virtually unqualified acceptance of their responsibilities was commendable, some of what they said was very revealing indeed.

Bancroft was a little inconsistent in claiming that he didn’t really know the difference between right and wrong, but also that he operated under peer group pressure – he didn’t want to be seen to be letting the Australian team down.

Indeed, he explicitly said that he would have felt just as bad the next day if he had said “no”, rather than taking the sandpaper to the ball as requested by the vice-captain, David Warner.

Smith said he had failed as a captain by “not wanting to know what was going on”, when he should have spoken up and put a stop to it. But, again, the board of Australian cricket must accept ultimate responsibility for setting the culture.

While again this board has begun to recognise and accept its responsibilities – both for the culture as well as for the way it mismanaged the scandal – there is still some way to go.

Most Australians have a very refined sense of what is good and bad, and what is right and wrong. They have every reason to expect our leaders, at all levels of our society, to lead on these moral and ethical standards.

 As we move into 2019, it is time we all reflected on the desperate need to address this most important issue.

Great civilisations of the past have died by neglecting such a challenge. 

John Hewson is a professor at the Crawford School of Public Policy, ANU, and a former Liberal opposition leader.