Former NSW MP and erstwhile partner of the premier Daryl Maguire cuts a pathetic figure in the ICAC witness box, meekly admitting to using his office as the representative of the good people of Wagga Wagga, albeit occasionally objecting that there were some holes even he wouldn’t crawl down to make a buck.
Maguire was a two-bit huckster, most of whose endless schemes failed to come off, though not for want of trying. But he was playing the same game played by far bigger, far more successful business and political figures across Australia: rigging the rules for their own benefit.
Australian business and politics is pervaded with the mentality that regulations are not to be adhered to but gamed, and if necessary changed by influencing those who make them, and intimidating, overriding or litigating those who enforce them.
Credible, powerful, independent regulators are needed to deter such behaviour, but it also needs a cultural shift from regarding lobbying for preferential outcomes as a core business activity to regarding it as evidence of a lack of integrity, managerial competence and credibility.
While the ICAC hearings have been unfolding, another saga of regulatory failure and poor culture has been playing out at the NSW Independent Liquor and Gaming Authority, which has teased out how rotten the culture of Crown was, from the board down. Directors treated their obligations with disdain, including in relation to some of the most serious regulatory requirements relating to casinos, around anti-money laundering.
Crown is a prime example of regulatory gaming, as Janine Perrett detailed this week. A giant black phallus now stands erect over Barangaroo on Sydney Harbour as testament to the absurd deal James Packer struck with the NSW Coalition government in 2012, with the NSW Labor Party — no stranger to cosying up to the Packers — lobbied into silence by their erstwhile colleagues and bosses, Mark Arbib and Karl Bitar.
Meantime junkets involving criminals, drug dealers and sex trafficking were going on at Crown’s Melbourne and Perth casinos, all enabled by a compliant Home Affairs Department.
The Crown board, with an array of prominent names, looks wholly respectable. Helen Coonan, former senior Howard government minister. John Horvath, former Commonwealth chief medical officer. John Alexander. Andrew Demetriou. Long-serving senior public servant Jane Halton. Harold Mitchell.
But the respectability — heavy with political and bureaucratic connections — is a veneer for the same sordid games Maguire was involved in at a lower level: wielding influence for mates. Only courtesy of extensive media reporting has Crown been brought up sharp and exposed to scrutiny by the NSW gaming regulator. The company’s culture, as Demetriou and Alexander admitted, failed.
At least, at this stage, there’s no suggestion Crown enabled child abuse. That was Westpac’s failing. Last month it accepted a $1.3 billion fine for tens of millions of money laundering breaches that included enabling 260 child abusers to make payments. Along the way it admitted that it could have spotted them earlier — which might have enabled them to be stopped earlier.
Austrac, unlike other regulators, was at least on the ball. But Westpac’s culture, like that of all the major banks, enabled this industrial-scale misconduct during the long years pre-Hayne when they were allowed to run amok by the Coalition government they so generously donated to.
Meanwhile, in the case of energy policy, the government has actually allowed its donors from fossil fuel companies to write the policy to boost gas consumption.
Last month also saw the CEO and two senior executives depart Rio Tinto over the shameful Juukan Gorge destruction, with the company citing a lack of individual accountability behind the decision — one forced on it by major institutional shareholders, not regulators.
Wherever you look, across different industries, even major corporations have profoundly flawed cultures and poor accountability that are only reactively addressed when an external intervention threatens.
Not every regulator is an Austrac or an ICAC. For years, ASIC was ineffectual and nobbled. The new aged care regulator is a study in hands-off regulation. They reflect a political culture in which compliant politicians are paid by donors to soften regulation in the name of slashing red tape, help companies, and underfund and disempower regulators where they can.
Maguire is only the crude, sordid end of a continuum that extends all the way to the Prime Minister’s office and the board rooms of some of our biggest companies, which encourages a culture of making the gaming of regulatory outcomes the core business model of major corporations.
Until that culture changes and we have powerful, independent regulators right across the economy, the scams and scandals will continue.
I would have no problem if they just scammed each other with their own money. But its not, its our money, public money, and politicians are trusted, paid good salaries, and take numerous oaths of office, to manage it ethically and fairly for us. We the public, via powerful and independent regulators, should be eternally vigilant against greed and misuse of this trust. It is our duty.
Until that culture changes and we have powerful, independent regulators right across the economy, the scams and scandals will continue.
Yes. A good first step would be a Royal Commission into reasons for regulatory failure in Australia. This should include, for a start:
All these suggestions are excellent. The problem I have is that Royal Commissions are usually toothless tigers set up to produce results that the politicians want.
The business culture Bernard carefully describes has been around for decades, but it has been made much worse with the deregulation of the economy both in a practical sense and in reinforcing an underlying culture of non-compliance and litigation against government regulations. But it also reflects the culture of Australia writ large where people try to get a better deal by paying cash payments to avoid GST and employ casual staff at lower wages and short term immigrants who have minimum employee rights, just to name a few.
This has been allowed to happen because of the development of politics as a career path over the past thirty years and the expectation in the mind of the general public that all big businessmen/politicians are corrupt, both factors feeding on each other. For the general public the attitude might be, “If the politicians and the businessmen can get away with it, why can’t I.”
Once more the gap between the concerned intelligentsia and the rest of the population becomes apparent, with the former being sidelined by the MSM–who just want gotcha moments and human interest stories–and politicians who know the general population will not want to listen to what the concerned intelligentsia have to say.
Thus why why we must agree with Sinking Ship Rat, the cultural attitudes running right through the general population is going to make it difficult to bring these business and corporate types into line, and ultimately contribute to a more cohesive and equitable society.
“The problem I have is that Royal Commissions are usually toothless tigers set up to produce results that the politicians want.”
True. That’s why I described it as a first step. If it had something like the remit I suggest its report should clarify many matters about what works and what does not in regulating. Even if the government ignores it, anyone could use it to point out regulators and regulations that are, by the findings in the report, set up to fail. When regulators do fail, the government could face demands to explain why the regulator was already known to be inadequate when compared to the findings of the report. And so on. Part of the problem at the moment is that when a government sets up some misbegotten half-arsed joke of an agency and calls it a regulator, nobody knows any better until its too late. There’s a generally pitiful level of understanding of what regulating should be and no concensus at present.
Regulators are seen to fail only when something explodes. Otherwise, stats as to infractions, prosecution and ‘successes’ are ignored; even in annual reports to the AG. Only sensational news is distributed.
I wouldn’t change a word of that.
Bring. It. On.
It really is sickening on so many levels. No accountability for anything. We cant even remember all the shonky deals- there are so many.
But surely 637 elderly people dying in aged care cant be ignored. The numbers grow daily. The Royal Commission put out the most piss weak yes piss weak set of recommendations.
The mechanisms for independent oversight are absolutely missing. Government gets rid of any Commissioners or Ombudsman staff who speak out and are fearless.
One day Australia might really show some courage and look at the conditions brutality cruelty and lawbreaking in the Immigration portfolio- now that would be a day of reckoning.
“Government gets rid of any Commissioners or Ombudsman staff who speak out and are fearless.”
Exactly. So far as the government is doing anything it is working hard to make things worse. The government also appoints feckless cronies and party hacks to head such agencies to remove any risk of independent action. Then the shameless packing of the Administrative Appeals Tribunal with failed party candidates and staffers under the ‘No Liberal Left Behind’ program also comes to mind. The blatant servility of the AFP to Coalition party interests is another example. Right now the government is busy putting a stop to that damned pesky impertinent National Audit Office by starving it of funds; we’ll not hear any more embarrassing reports from there in future. And there’s the big one – the independence of the judiciary. It’s days are surely numbered. If you want to see the future, look at how China is governed. The Coalition might make hostile noises about that country, but it seems to find the CCP an admirable model to follow.
It seems the LNP is the party of two bit hucksters. James Packer was well aware that regulators will always be willing look the other way when nefarious activities are happening. Thank you LNP for upholding dodgy standards, it’s for the good of all hard working Australians.
Not just the Liberals. Any party in power seems to be vulnerable to corruption and corporate influence.
We need to put maximum terms on our politicians say 3 terms max, so that the attitude of entitlement does not become all consuming.