We’ve seen all the misconduct revealed by the banking royal commission, with the Morrison government accepting all the commission’s recommendations before the 2019 election, thenWe’ve seen consulting firm PwC caught abusing the trust of the Tax Office, with further inquiry revealing the huge sums governments are paying the big four accounting firms for underwhelming advice on myriad routine matters.
In other words, we need a fair bit of the benefit to “trickle down” from the bosses and shareholders at the top to the customers and workers at the bottom. That’s the unwritten social contract between us and big business. And for many years, enough of the benefit did trickle down. But in recent years the trickle down has become more trickle-like.
Another cause was explained by a former Reserve Bank governor, Ian Macfarlane, in his Boyer Lectures of 2006: “The combination of performance-based pay and short job tenure is becoming increasingly common throughout the business sector ... It can have the effect of encouraging managers to chase short-term profits, even if long-term risks are being incurred, because if the risks eventuate, they will show up ‘on someone else’s shift’.