Amid the biggest pandemic since the Spanish Flu, and the biggest economic calamity since the GFC, Australia’s top public institutions are showing their worth by speaking truth to power.
As we told the Parliamentary Inquiry into this affair, the sports scandal represented a new low – the ‘Cambridge Analytica era’ of grants rorts – and the affair underlined the crucial role of the ANAO as a defender of the public interest.
Right now, the ANAO is holding its ground despite intense pressure and push back from several quarters including the executive branch of the federal government.
Last year, the Hayne royal commission roasted our corporate regulators for being too soft and cosy. Since then, they seem to have got the message. ASIC is taking strong action against ME Bank for potential legal breaches after the bank’s chief executive admitted customers were deliberately kept in the dark over changes to its redraw policy.
ASIC Commissioner Sean Hughes told the House of Representatives Standing Committee on Economics (3 June 2020), ‘ASIC does have concerns about how [the ME Bank] matter has been handled. At a time when there are significant sensitivities for consumers about the economic impacts of the COVID-19 pandemic, this matter could have and should have been handled better.’
In the latest example of greater activism and a greater willingness to slay sacred cows, the ATO is taking on one of the Big Four accounting and audit firms over a ‘tax avoidance’ scheme.
According to recent ATO analysis, only 40% of our big businesses were believed to be paying the correct amount of tax, compared to 90% of individuals. Private corporate advisers are culpable here, and the ATO is ready to do something about it.
As we’ve previously pointed out, there are unhappy tensions between the major service lines of the Big Four firms. Corporate auditing lends an aura of rigour and integrity to management consulting services. Tax avoidance advice helps strip that aura away.
In the COVID era, the stars have aligned in an unexpected way. There is a greater focus on companies’ social purpose and impact, and less patience with the old tricks of transfer pricing and window dressing that previously allowed big corporations to avoid paying their fair share of tax.
As we told the sports rorts inquiry, in the Trump era there are politicians and corporate players who act like they are above the rules – but, fortunately, our legal system and major regulators are working from a different playbook.
The courage and activism of our public defenders is keeping a lid on the worst abuses of public and corporate power.
At the sports rorts inquiry, we asked the committee to indulge in a piece of future-gazing. Regulatory and legal wheels move more slowly than those of the daily news cycle and the second-by-second tweet cycle. But it will be interesting to see, in a few years’ time, how many of the people who are ‘above the law’ are very much under it.
Scott Hamilton and Stuart Kells are Melbourne based policy advisors. Professor Kells co-authored ‘The Big Four’ .