Why Jim Chalmers needs to endorse a National Ethics Institute
A $30m investment could deliver a $45bn boost to Australia's GDP, but Treasurer Jim Chalmers remains hesitant despite unprecedented cross-sector support for a National Ethics Institute.
Treasurer Jim Chalmers knows a bargain so a one-off $30m capital injection to produce a $45bn productivity boost to GDP should be a no-brainer.
But despite support for a National Ethics Institute from a group including The Australian Council of Social Service, Business Council of Australia and Australian Council of Trade Unions, Chalmers has yet to bite.
Simon Longstaff at the Sydney-based The Ethics Centre wants to take the organisation national under the Institute’s banner.
He is backed by The University of Sydney and The University of New South Wales and is now talking with other educational bodies in an attempt to win their backing and eventually government support.
Longstaff was the now renamed The Ethics Centre’s first boss in 1991.
Sydney Uni said in a statement: “The Institute would be the first of its kind anywhere in the world – an independent body to advise on the profound ethical questions that face the nation. It would work with existing initiatives and institutions to strengthen and reinforce ethical infrastructure and decision-making in all sectors of life and work across Australia.”
Longstaff adds: “Stronger ethical infrastructure means a stronger economy – a more prosperous and equitable Australia.”
Australia’s ethics ranking is falling and now stands below New Zealand, Finland, the Netherlands and China.
Figures produced by Deloitte Access Economics show a 10 per cent increase in ethical standards would increase GDP by $45bn a year and at a time when trust in government, business and major institutions is at all-time lows, the initiative makes obvious sense.
The AI explosion makes the case for an established ethics framework even clearer, which is a touch ironic, given Deloitte recently has had its own AI issues.
Trouble is, on paper, better ethics is like motherhood: it benefits all, which is a handicap in politics where the horse called Self Interest is always favourite. Far better to have an easily identifiable victim and winner in political debate.
Private markets problem
ASIC boss Joe Longo was at the National Press Club this week banging the table about governance problems in the private (and public markets) in search of more cost effective pro-growth regulation.
At its simplest, the issue is industry ethics. Aubrey Blanche, the head of advisory at The Ethics Centre, defines ethics as making the best choice and living with it.
The goal is to establish a framework to align ourselves with our values, principles and the greater good when the options are often messy, complicated and confusing.
Canberra obviously would be the ideal place to start selling the national body acting as an advisory and educational service.
For Longstaff the goal is clear, embedding ethical decisions in the national consciousness and tackling the very real ethical challenges facing the nation. If adopted, this initiative would reduce the need for regulation, enable better policy reform and improved worker benefits.
This explains why a letter last year in support from Canberra-based Senator David Pocock was co-signed by the ACTU, BCA and ACOSS which must be some sort of first.
In another letter to the government budget review, Sydney-based teal Sophie Scamps wrote on behalf of colleagues urging support for the body which would act as an independent adviser, educate public servants and others, raise awareness and importantly track performance of the nation’s ethics infrastructure.
The Australian contacted both politicians this week who emphasised their continued support for the creation of a National Ethics Centre.
The campaign for a financial structure, similar to that adopted by the Grattan Institute, would be to establish a $55m endowment fund, provided $30m by the feds, $15m by business and $10m (in cash or kind) from the UNSW and Sydney Uni. Ethics Centre revenues now come primarily from donations, consulting services programs and ongoing subscriptions.
The Sydney-based centre stays largely out of the media except when used by the likes of the Australian Olympic Committee and Cricket Australia which in the past have hired the centre to review their governance. They wanted to show the world they were serious about fixing their problems.
The Ethics Centre operations are humming along including counselling and educational services, the Banking and Financial Services Oath, professional ethics programs, a primary education program running through NSW primary schools, and Ethi-call a free national helpline.
Its board is chaired by prominent business person, Peter Joseph and includes journalist Narelle Hooper and former MLC boss Steve Tucker. Its backers include BHP, Karen Wood, Stephen Fitzgerald and David Gonski.
The campaign is ongoing but still awaiting some recognition from the Albanese government that what is the bleeding obvious actually also makes sense.
Mark Vassella’s last act
It’s best to leave the stage when the audience is still clapping and that precisely is what Mark Vassella has done at BlueScope after a stellar eight-year reign as boss of the local steel monopoly.
Chair Jane McAloon now presides over the first major listed company with a female chair and chief executive, with company veteran Tania Archibald, as expected, named as his replacement.
The transition was superbly orchestrated in stark contrast to some others on the bourse where a star CEO was left in charge too long (Qantas).
Archibald is a former CFO, strategy chief and Australian boss where she has built up a reputation for being clear and disciplined with a customer centric mindset.
BlueScope is largely in good shape which makes it entirely appropriate for an insider to take the top job. Before joining the company in 2000, Vassella learned the steel game at the feet of industry doyen the late Ray Horsburgh.
A staunch advocate for the local manufacturing sector, Vassella was also smart enough to realise its sustainability depended on global diversification.
Vassella played a key role in developing its US arm which now accounts for more than half of BlueScope revenues.
His reign produced a credible 71 per cent total return, albeit underperforming the market by some 45 per cent, while adding $3.4bn to BlueScope’s market value which now stands at $10.1bn.
Archibald has some work to bring US coated products up to scratch and also faces some tough decisions as she transitions the company into a decarbonised world.
She may also, by the time of the handover in February, have the other half of the old BHP steel division under her control when administrator KordaMentha finally removes itself from the gravy train and hands BlueScope control of the Whyalla steel mill and its quality magnetite iron ore mine.
KordaMentha has reportedly delayed the next round of the sale process until month’s end.
Vassella mastered the art of public relations running a monopoly asset, quick to lodge complaints against dreaded low priced imports and to raise the profile of politically contentious inputs like expensive gas.
He also helped save and revive Port Kembla’s basic steel operations. Under his reign as Australian boss, the company was also found guilty of attempted cartel behaviour.
Vassella leaves at a time of geopolitical uncertainty but a local steel market which is robust, with confidence brimming about better conditions next year.
But in the words of one customer, the bottom line of his tenure was “excellent”.
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