Here’s one of the reasons why the electoral backlash against neoliberalism isn’t going to go away any time soon. Our primary corporate regulator is Fairfax’s Adele Ferguson, not the panoply of regulatory bodies ostensibly charged with protecting consumers, workers and other businesses from corporate malfeasance.
The detailing by Fairfax and the ABC of the behaviour of companies within the retirement home sector in only the latest in a succession of exposures: gouging of financial planning customers, ripping off of insurance claimants, extensive underpayment of retail workers by franchisees — all involving major companies, including the Commonwealth Bank, all reflecting (despite the denials of senior executives) systemic issues — and all reflecting serious regulatory failures.
The multiple and equally systemic failures by the Australian Securities and Investments Commission in relation to the Commonwealth financial planning scandal are well known, and have been admitted by ASIC itself. But the Fair Work Ombudsman has been made to look badly reactive and flatfooted by a succession of revelations that not merely 7-Eleven and Caltex but other firms were involved in underpayment of workers. And regulators like the ACCC are only now moving to address the revelations about Aveo’s involvement in retirement homes.
Retirement homes are a complex industry, involving medium-term access to housing for people who are usually asset-rich but cash-poor, and often involving family members acting as their agents. Moreover, the sector falls between state and federal regulation. It’s a recipe for gaming and exploitation of information asymmetry by companies. But then so too are financial advice, where financial planners are supposed to offer advice in the best interests of people with only a limited grasp of financial markets, and employment of foreign workers and foreign students, seen as a soft touch because of their lack of language skills, their visa-dependent status and their lack of understanding of options for redress.
That is, these are predictable areas where you would expect regulators to be proactive in policing the behaviour of corporations. Time and again, however, they only lumber into action after Ferguson reveals some appalling scandal, because apparently a journalist is better at finding out regulatory breaches than the regulators responsible for enforcing the law.
Part of this is because regulators are underfunded — ASIC, already worse than useless at its job, had its funding cut further by the Abbott government; eventually, part of that funding cut was reversed by the Turnbull government. But it’s primarily because there’s a lack of demand for strong enforcement from governments. The ethos from both sides of politics in government has been about deregulation (it was Labor that established a ministry for deregulation). Businesses now take it for granted that they should be “consulted” about any new regulations or taxation, in a way no individual is ever permitted to have. The signals that come from government have an impact on bureaucrats; it takes a rare public servant — Allan Fels was one — to ignore them and push hard against the corporate sector.
But every new example of corporate malfeasance sends a clear message to voters that the current system is tilted against them, that corporations get what they want but as consumers and as taxpayers, Australians get short shrift — they are there to be fodder for the bottom lines of large companies, and governments and the regulators ostensibly protecting them have little interest in aggressively doing so.
Handily for corporations, the steady collapse of the Australian media sector means a diminishing threat from the likes of Ferguson and her shrinking number of colleagues. But don’t expect the filthy mood of Australians toward corporations to improve any.