Executive summary

At the dawn of the third decade of this century, Australia faces significant challenges – navigating the health and economic impacts of the COVID-19 pandemic, responding to emerging issues around the future of work and introduction of new technologies, preparing for an increasingly risky geo-political environment and addressing longstanding social and environmental challenges including climate change, and reconciliation with Indigenous Australians.

Addressing these issues will require effort from many organisations, businesses, community groups and government bodies, and will draw on a range of competencies and technical skills. Inevitably, we will need to make some ‘big decisions’ – and this will require leadership of a quality that enables society to cohere in the face of external and internal pressures that would otherwise cause divisions. In these circumstances, trust will be at a premium – especially for key institutions. In turn, this will depend on the quality of ethical decision making by individuals, groups and organisations.

There remains significant scope for Australia to lift our levels of ethical behaviour and trust. In 2019, Australia was rated as being only ‘somewhat ethical’, achieving an index score of 37 on the Governance Institute of Australia’s -100 to 100 scale, four points down on the result two years earlier. The banking sector, which all Australians rely on, was considered the most unethical industry.

When asked whether people keep their word or make agreements honestly, everyday Australians say ‘yes’ … but do not hold this view with great confidence – with an agreement score of around 12 out of 18 on the Household, Income and Labour Dynamics (HILDA) survey. According to the World Values Survey, just 54% of Australians state that they generally trust other people they interact with. While this might be a higher score than achieved by many countries, including the USA and UK, the Australian score is 10 percentage points behind the world leader…

Contents
Executive summary 3
1. Introduction 5
2. Ethics and ethical infrastructure 8
3. Ethics and the economy 20
4. Improving ethics in Australia 37
Appendix A: Modelling the individual benefits of ethical behaviour 48
Appendix B: Modelling the business benefits of ethical behaviour 54
Appendix C: Modelling trust and economic outcomes 56
Limitation of our work 58

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