Scott Morrison lapel pin

Bill Shorten’s call for a royal commission into the banking industry is just another distraction, just a thought bubble.

That was Malcolm Turnbull in April 2016, in the months before that year’s federal election. It was a demonstration of the structure of power in Australia: the Liberal Party providing protection for the country’s biggest corporations, who generously rewarded them with donations. The Liberals had long provided such protection — gutting the corporate regulator, ASIC; opposing financial advice laws that the big banks objected to; attacking industry super funds. The big banks would also be the biggest beneficiaries of the only result of Malcolm Turnbull’s flirtation with tax reform — a massive tax cut for large corporations worth scores of billions over a decade.

Turnbull’s government narrowly trailed Labor at the time, but he was expected to best Bill Shorten — over whom he held a vast lead as preferred Prime Minister — in the coming election. The basic structure of power in Australia’s governing class — in which powerful interest held sway over politicians to whom they handed millions in donations — looked intact. As it turned out, not so much.

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By the end of 2018, that structure lay exposed and rotting, courtesy of a series of business scandals and political disasters that tore off the veneer of Australian democracy, revealed its deep distortion by vested interests and undermined the once powerful alliance of the Liberal Party and business. Malcolm Turnbull would be gone, the Liberals would be railing at big business, the reputation of Australia’s corporate elite would be mud. 

The Liberals themselves ended the year with an invidious list of achievements. A hopelessly out of his depth man-child of a prime minister. Open warfare within its ranks over any number of issues — its treatment of women, factional brawls, the fallout from the dumping of Turnbull. Backbenchers threatening to defect. A Coalition junior partner offering its second sex scandal of the year and on the verge of dumping its own leader. Major issues like climate change are simply ignored because the government is incapable of rationally discussing policy. If this government was the plot of cheap political thriller, you’d mock how absurd it was.

But the failure went beyond the Liberals, rippling out like a stone dropped in a sewage pond. 2018 was a year of spectacular failure by all sections of Australia’s governing class. While far more disciplined and competent than the Liberals, Labor marked the end of the year with astonishing cowardice on national security, of a kind that will inflict long-term damage on the country, and stayed silent on the worst cover-up of recent decades, the illegal bugging of Timor Leste and the persecution of Witness K and Bernard Collaery. NSW Labor was once again being investigated by ICAC, and let us not forget Luke Foley. The Greens were marked by infighting, especially in NSW, where the party was, by the admission of one of its state MPs, “rotten and corrupt”, demonstrating that the Greens, perhaps reflecting Kissinger’s aphorism about academic politics, could do civil wars even better than the Coalition. In the lunatic fringe down in the (far) right corner of the Senate, vile men and one woman competed to outdo one another in racism and misogyny, in a kaleidoscope of endlessly changing allegiances. Many in the senate across all parties weren’t even elected, but arbitrarily put in their by the eccentricities of the High Court, an outdated constitution and electoral laws.

And failure was systemic within big business. The banking royal commission — even in the shrunken form imposed by the Liberal Party — exposed a staggering array of misconduct, theft, gouging and negligence within Australia’s biggest companies, presided over by the elite of corporate Australia. Australia’s largest companies, it turned out, had combined ingenuity and malice to devise such acts of genius as life insurance you paid for after you died and fees for service for people who had no one to even provide any service. Another sector dominated by major corporations, energy, found itself under attack even from its former political allies for price gouging and rent-seeking and was threatened with being broken up. Wage theft, particularly by major retailers, reached epidemic proportions. Unsurprisingly, Australian workers racked up a sixth year of wage stagnation, with many going backwards in real terms while corporate profits surged.

The failures of corporate Australia were facilitated by the staggering failure of corporate regulation: ASIC — once lauded by Scott Morrison as having the “powers of a standing royal commission”  — was exposed as so timid it even let companies dictate the media releases that functioned as its sole response to even serious misconduct. APRA, the previously well-regarded prudential regulator, was also left looking useless. Another “regulator” spent much of the year under the hammer, and rightly so: the Department of Agriculture has presided over a live export industry characterized by astonishing negligence and sickening cruelty. The Australian Commission for Law Enforcement Integrity was repeatedly humiliated: the subject of a truly scathing ANAU audit in August, it was exposed as operationally useless by the media in November. The Home Affairs department preserved its proud reputation as Canberra’s least competent agency with yet another savaging from the ANAO over the merger of Immigration and Customs. The head of the Australian Public Service Commission, John Lloyd, left before he could be the subject of a critical finding over his behaviour with his colleagues at the discredited Institute of Public Affairs. And a long-time Liberal staffer, Phil Gaetjens, was appointed Treasury Secretary, in the most brazen attempt at politicisation of the public service in a generation.

Nor did the media cover itself in glory. The largest media company in Australia is now chaired by a former senior Liberal, consequent to changes demanded, and obtained, of a Liberal government, to enable the takeover of the perennially mismanaged Fairfax. That takeover was waved through by the competition regulator despite the catastrophic lack of diversity in our media. The ABC, supposedly the guarantor of independent journalism, was ripped apart by the war between an out-of-her-depth MD and an inexperienced chair incapable of — or perhaps unwilling to — stand up to the politicians who appointed him, while hapless executives devised new ways to cave in to the government. And News Corp became ever more Fox News-like, albeit without the audiences, with Sky News transformed after 6pm into an old white male rage-wank, complete with actual Nazis and racist abuse.

For citizens who had even minimal expectations of Australia’s governing class — that those in government would focus on running the country, that the opposition would oppose policies that harmed the national interest, that regulators would regulate, that the public service would adhere to its own code of conduct, that the media would not give a voice to those who peddled hate, that the ABC would operate competently and independently of government, 2018 was a year of profound disappointment. Australia’s leaders, across politics, the media, business, the public service, were unable, or unwilling, to do even the basics of their jobs properly.

These failures had different causes, but a consistent theme runs through them: lack of accountability. There has been a clear link between the lack of regulatory accountability and the egregious misbehaviour of the big banks and AMP. Finance industry executives simply had no fear of either ASIC or APRA, toothless watchpoodles who could be litigated or argued out of the way even in the case of criminal conduct. When people believe they can get away with bad behaviour, they almost invariably will engage in it.

That lack of accountability runs through other areas.

Politicians insist that they are accountable to voters every three years, but the problem is, in between they have zero accountability. Our political donation disclosure laws were unfit for purpose a generation ago and become ever more absurd now. There is no Commonwealth anti-corruption body and the one proposed is a farce. The lobbyist register and the rules around it are risible. Meetings between stakeholders and lobbyists and politicians are hidden from view. The parliamentary committee system is too dominated by the executive and frequently partisan in its operation. MPs and senators can engage in the most egregiously offensive conduct in parliament with no consequences.

A similar situation applies to public servants. They, at least, must front senate inquiry and estimates hearings, but these are so curtailed and restricted as to pose little actual threat of accountability to bureaucrats anxious to hide things embarrassing to themselves or their political masters. Compare, for example, the outcome of the banking royal commission, where regulators and bank executives couldn’t insist on taking inconvenient questions on notice, versus the machine-gun use of that tactic at parliamentary hearings. A senior public servant who has egregiously stuffed up will, unless it is in the political interests of the government, face no consequences of any kind even if criticised by independent bodies such as the ANAO, and can fail over and over again at the highest levels in high-profile portfolios with impunity if politically protected.

The lack of accountability even extends to the media. It is impossible to name a single director or executive who has ever suffered any consequences from the extended mismanagement of Fairfax over two decades, which resulted in the company ceasing to exist — nor has the ACCC’s inexplicable tolerance for the relentless reduction in media diversity blotted anyone’s copybook at that regulator. The Australian media, which loves to hand itself endless awards for its “yarns” and “scoops”, is on a par with politicians in terms of reputation with the public, and faces a bleak future as consumers turn their back on it.

None of this is accidental: these are all powerful people, the most powerful in the country, who have worked hard to protect themselves from transparency and accountability, who have undermined bodies that might offer those, and who rail at the suggestion they might face consequences for their actions, using the rhetoric of affronted professional pride. There’s no need for a federal ICAC because there’s no corruption in the Commonwealth. The Canberra bubble is always the Canberra bubble and I’m not distracted by it. There’s no need for a banking royal commission because ASIC is the tough cop on the beat. The donations were declared in accordance with the relevant legislative requirements. I want to make sure that this Christmas, that I have done everything I can to keep Australians safe. The department disagrees with the ANAO’s findings. I’ll take that on notice, senator. A few bad apples shouldn’t be allowed to obscure how important business is to job creation and the need for investment. Readers can be assured we will continue to provide high-quality journalism.

Each of these lies and distractions eats away at citizens’ belief in our system of government and the management of our economy, drip by drip by drip, corroding trust, not just in politicians or business figures or journalists — none of whom are well regarded by the community — but in the very institutions of our polity. In 2018, the long-term damage became impossible to overlook. Yet so many lies continue, and our institutions are weaker than our ruling elites think.

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Peter Fray
Peter Fray
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