You know it's bad if you're on par with Paraguay

AUSTRALIA's ranking is on the slide as a place to do business.

ACCORDING to the World Bank, as a place to do business, Australia has slipped from 60th to 65th place in the past 12 months. This puts us alongside countries such as Turkey and Paraguay. For context, our biggest trading partner, the US, is ranked ninth. Our closest ally culturally and geographically, New Zealand, tops the list.

The specific category the World Bank graded us on was "protecting investors", and it's no wonder Australia just keeps getting worse. Even Italy, on the brink of defaulting on its loans, ranks higher than us.

When you consider the sovereign risks attached to constant changes in the design of the mining tax, the uncertainty surrounding what will happen with carbon pricing (partly the fault of the opposition, which is pledging to repeal it), and plain packaging legislation which tramples over the trademarks of tobacco companies, Australia is becoming an increasingly risky place to do business. The risks come from political uncertainties caused by government incompetence, the minority parliament and an opposition prepared to undermine confidence to achieve an advantage.

The Australia Network tender debacle is the latest addition to the list of process failures by this government, which create sovereign risk for companies making investment decisions in Australia.

Labor put a tender process in place because it decided that it wanted to appear as though it was comfortable with a commercial enterprise being involved in the soft diplomacy the network partakes in. It did this because centre-left governments are constantly battling accusations (rightly or wrongly) that they are not the friends of business. What better way to dispel that idea than show a willingness to let Sky News bid for a government contract? But the government always wanted the ABC to win.

The first round of the tender saw the contract awarded to Sky News (surprise, surprise: a commercial outfit put together a better tender than a slow-moving government-owned body). Communications Minister Stephen Conroy didn't like that one little bit, so he took control of the process from Kevin Rudd and called for it to be done again. This was a message to the ABC to lift its game. However, Sky again was the favoured bid, according to reports, posing a problem for Conroy -- a factional heavy from way back who is used to getting his way.

Leaks about the process were used by the Communications Minister as the excuse to shut the process down altogether (even though they could only have come from the government), and declare the ABC would continue to run the Australia Network. Never mind that a federal police investigation is under way.

Despite being partly employed by Sky News (disclaimer taken care of), I happen to be of the view that the Australia Network never should have been put out to tender in the first place. A network broadcasting throughout our region as part of a soft-diplomacy strategy is better being state-owned.

That said, once the tender process was called for, that should have been the end of such philosophical arguments. You cannot create a level playing field for a tender and then complain about the outcome when it doesn't go your way.

For the sake of Australia's reputation for doing business, the government was bound to follow the tender process once it had started, and award the bid to the best entrant. If you were an investor abroad looking at the way that this government does business, you would think twice about investing in Australia, as the World Bank downgrade implies (it happened before yesterday's announcement).

If we are serious about attracting investment into other areas of the economy to diversify our interests away from being a quarry for China, the government must get serious about minimising the sovereign risk it creates through substandard processes.

Instead of crowing about our AAA credit rating, born out of our Lucky Country status, Labor should start doing what it says and saying what it does. To paraphrase the PM: it's simple really, stop running a crap government.