Australia’s fiscal debt will cost Gen Z's future

When my HECS debt exceeded $50,000, my jaw dropped, and I wondered how I’d ever pay it off. In contrast, my father enjoyed a free tertiary education when he was my age and entered the workforce unburdened by debt. Is that fair? 

The Baby Boomer generation faced huge challenges, like post-war reconstruction, promoting civil rights and living with the prospect of nuclear war. But it had its boons too. This is the generation that benefited from a buoyant labour market, cheap housing and enjoyed free university thanks to the Whitlam Government. Today, a booming housing market is helping to fund a luxurious retirement for many of that generation.  

On top of this, middle-aged and older Australians have disproportionately benefited from government spending in recent years – spending that has been funded by taking on debt that younger generations will have to pay off. So not only do younger generations not have the benefits that older Australians have enjoyed, but they have the added burden of government debt. 

It’d be like if I was able to avoid paying my HECS debt for my university degree by foisting that debt on my children. I would benefit from the education and its employment opportunities, but my children would bear the cost. Just as that would be unfair, so too are Boomers passing government debt onto younger generations while they get to enjoy the benefits of government spending today. 

This is the problem of intergenerational injustice when it comes to government debt. Fiscal spending is, by nature, short-term and aims to solve economic problems quickly. In moderation, it isn’t bad. However, in excess it disproportionately benefits people who are working at the time. Younger and future generations then bear the brunt of debt repayments accumulated by previous governments, while receiving fewer immediate benefits from the public spending financed by that debt. In contrast, older individuals enjoy the immediate advantages of government expenditure without the long-term responsibility of repaying the accumulating fiscal debt.  

For example, the large government spending during the COVID-19 pandemic has left Australia with a debt in excess of $800 billion. That is around 38% of Australia’s GDP. This means for the next 20-30 years, when today’s young Australians will be entering the workforce, their taxpayer dollars will not go into benefiting the society they live in, but rather repaying these loans. If the government cannot repay those loans, it must either increase taxes or spend less. It means young people potentially could lose healthcare benefits or have less personal money due to increased taxation or cuts in services.  

Philosopher Juliana Uhuru Bidadanure argues that we should be focused on relational equality at a moment in time. Relational equality emphasises the significance of social relationships and interdependence in achieving a more equitable society, highlighting the need to address and transform the structural conditions that perpetuate inequality.

Younger people today should not have to financially suffer today because it is expected that their lives will improve later.

Likewise older people in nursing homes shouldn’t be punished because they had a good life earlier. Everyone, regardless of age, should be entitled to a good life. Debt ultimately undermines this principle of relational equality if the benefits are only short term, as an unfair burden is placed unto future generations.  

Jobseeker is another example contributing to this inequality. Members of Generation Z who weren’t working or on Youth Allowance during the pandemic received no government benefits, much of which were funded by debt. So, over the next two decades, it will fall mainly on Generation Z to repay that debt, even though they received the least benefit from it. In fact, someone born today will likely have to pay off a portion of that debt in their first job even though they were not alive to experience the COVID-19 stimulus. Older generations will not live long enough to see through the long-term consequences of debt, but young people today will.  

It is important to note that not all debt is bad, such as long-term spending as investments today can greatly benefit future generations. Unlike pandemic-related debt, which disproportionately benefited older people, expenditure on infrastructure contributes to the collective good and is eventually enjoyed by younger people when projects are completed, demonstrating a more equitable form of financial responsibility. 

In addressing the pervasive issue of intergenerational injustice fuelled by fiscal government debt, we must advocate for policies that prioritise relational equality now. Balancing the scales requires a nuanced approach, moderating short-term fiscal spending, focusing on the impact of spending in the long-term through investments in projects like infrastructure.  

Governments need to ensure that they are careful with how their spending today will impact future generations. Short-term spending promises before an election are an example of short-term thinking from our political establishment. Naturally, voters who benefit from such spending might be inclined to support such policies. But they should be mindful of not only their self-interest but the interests of future generations, including their children and grandchildren. 

Meanwhile, Generation Z would benefit from advocating for balanced government budgets, for it is in their interests. Young people should always be cautious whenever they hear the words “fiscal”, “stimulus” and “injection” into an economy. Because, in the future, if those government actions risk a debt blowout, they are the ones that will have to pay for that intervention in the future.  

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Productivity isn’t working, so why not try being more ethical?

Economists and business councils have been telling us for years that we must improve our productivity if we want to be more prosperous but, so far, they’ve had little success. Surely, there’s something else we could try?

As we’ll see, it’s something for Treasurer Jim Chalmers to ponder as he puts the finishing touches to next Tuesday’s budget.

Economists have many strengths, but they don’t win many prizes for thinking outside the box. Productivity is the obvious way to increase our prosperity but, despite all the admonition, for years it’s been hard to achieve, both here and in the other rich economies. It’s clear there’s a lot economists don’t know about how productivity is improved.

So, is there nothing else we could do to improve the way the economy works and the satisfaction it brings us? Of course there is – particularly when you remember this isn’t just about dollars and cents. Don’t you think life would be better if we could do all our earning and spending in an economy that generated less angst?

I’m indebted to Dr Simon Longstaff of the Ethics Centre for reminding me that behaving more ethically would be a good way to get better results from the economy.

Huh? How does that work? Let me tell you.

Ethics is a set of beliefs about the right way for people and organisations to behave, particularly in their relations with other people. Often, the right thing for us to do in particular circumstances is obvious.

It’s obvious, for example, that we should (almost) always obey the law. It’s just that obeying the law isn’t always convenient or inexpensive. And sometimes when our own interests are top of mind, it’s hard to see what’s obvious to everyone else.

In any case, because differing groups of people have differing beliefs and motives and objectives, ethical dilemmas – deciding what’s the right thing to do in all the circumstances – are common, particularly in business. That’s why we have a new profession of ethicists offering advice to organisations, of which Longstaff is the most prominent.

But what’s that got to do with the economy?

Well, let’s be clear. The only reason we should need to do the right thing is that it’s the right thing to do. And the only reward we should expect is being able to sleep well at night in the knowledge that we’re treating people justly, often at some cost to ourselves.

However, as Deloitte Access Economics has demonstrated in a report for the Ethics Centre, there is a strong “business case” for behaving ethically. A case that makes sense not just for individuals and businesses, but also for the treasurers and Treasuries responsible for improving the way the economy’s working.

The case rests on an obvious, but often forgotten truth: market economies rely on a high degree of trust.

Trust between buyers and sellers. Trust that you’re not selling me a dud. Trust that your cheque won’t bounce.

Trust that you’ll let me return it if there’s a problem. Trust that you’ll honour your promise to service the thing for the next X years. Trust that you won’t pinch someone else’s bag from the airport carousel. Trust that you’ll repay the money I lent you.

Trust that if I let you check yourself out at my supermarket, you won’t slip in a few things you didn’t ring up. Trust that if I work for you, you’ll treat me fairly. Trust that the law will back me up if you do the wrong thing.

Point is, the more confident we are that we can trust each other – trust the businesses we deal with – the more smoothly and cheaply the economy runs and the more business gets done. When we have to spend a lot of money on security and making sure we’re not ripped off, the costs mount up, and we end up not doing all the transactions we could.

So, how do we get more trust into the economy? How do workers, employers and businesses get themselves a good reputation? By always behaving ethically. (I could say this also applies to politicians, but that would be pushing it.)

Research by Access Economics finds evidence that fewer unethical decisions lead to better mental and physical health for individuals. And evidence that unethical behaviour leads to poorer financial outcomes for business. And evidence that ethical behaviour results in higher wages.

But Access also reminds us of the evidence that our ethical standards could be a lot higher than they are. The World Values Survey finds that only a bit over half of Australians think most people can be trusted. The Governance Institute finds that, on a scale running from minus 100 to plus 100, Australia ranks at plus 45, or “somewhat ethical”.

Then there’s the string of royal commissions finding unethical or even illegal behaviour in institutional responses to child abuse, misconduct in the banking industry, and aged care. And that’s before we get to the epidemic of “wage theft” that so many otherwise respectable big businesses have had to admit to – all of it purely accidental, apparently.

OK, OK, we could do a lot better, with that producing tangible economic benefits. But how? Well, one approach would be for economists and econocrats to switch their sermonising from productivity to ethical behaviour.

Perhaps not. What would help is for ethical questions to get a lot more of our attention. As sociologists understand, but most economists don’t, businesses – like the rest of us – tend to want to do what others are doing. If we’re all being ethical, I don’t want to be seen as uninterested in ethical behaviour.

If we could give ethics a higher profile, we’d probably get more of it.

If expert advice on ethical problems was more readily available, more would be asked for. If there were more training and meetings and conferences on the topic, more decisions would be examined for their ethical implications.

Longstaff’s Ethics Centre has a proposal to improve our “ethical infrastructure” by teaming up with the universities of Sydney and NSW to establish an Australian Institute of Applied Ethics, which would be open to receiving requests from governments and the private sector to report on major ethical questions facing the nation. It would be a bit like the Productivity Commission or the Australian Law Reform Commission, but it would not be a government body.

It would also contribute to education, training and leadership development, building the practical skills of good decision-making on ethical issues in the private and public sectors.

Copying the pattern used to establish the hugely successful Melbourne-based Grattan Institute, the proposal is for the federal government to contribute $30 million towards a $40 million one-off endowment. The new institute would be funded from the earnings on this endowment, plus earnings from providing education, training and other services.

We’ll learn on budget night whether Chalmers and his boss are acting on this sensible idea for achieving a better economy, or whether they will be content with more platitudes on the need for greater productivity.


This article was originally published in The Sydney Morning Herald.

Is there such a thing as ethical investing?

If you’re looking to start investing in the stock market (and you’ve stumbled across this article), chances are you might be investigating how you can do it ethically – without supporting companies that are actively causing harm to the world.  

“Ethical investing” has no fixed definition in Australia, Life and Shares host Cris Parker points out in The Ethics Centre’s latest podcast. Susheela Peres Da Costa, Chair of the Responsible Investment Association of Australasia (RIAA), says typically ethical, or responsible, investing is about, “consumers assuming something is screened out of the portfolio – what you don’t invest in is a typical ethical investment question.” 

But finding out which companies are involved in activities you don’t want to financially support is not as cut and dried as you might hope. 

“There’s a lot of seductively simple solutions out there,” Peres Da Costa says, such as points-based system ESG (Environmental, Social and Governance Investing). 

“Some of the most profitable companies involved in some of the most harmful activities actually do very well on some of the scoring systems,” Da Costa says, “because they’ve got great volunteering programs and programs for replacing their light bulbs with LEDs, and they give a lot of money to charity. But investors need to be smart about not falling for the gloss. As someone who’s professionally analysed company reports, I would never, ever believe anything in a value statement…” 

“However, we really need to address the elephant in the room, which is actually the cost. It is just so expensive to obtain proper financial advice – to give you an example, the median price in Australia is $5,000 per year.” 

Even if you don’t think of yourself as being in the stock market, if you have super in Australia, then your super fund is investing your money on your behalf. Happily, many super funds offer investment packages classified as “sustainable”, which aim to buy into clean and renewable energy shares and avoid companies involved in fossil fuels. 

The RIAA ranks Australian super funds on their responsible investment approaches: its Responsible Investment Super Studies highlight funds that choose shares in companies that aim to do good for people and the earth and screen out those with poor or questionable practices. 

Still, the waters are murky as to which companies are doing the most harm, and which are trying to do good. As Life and Shares host Cris Parker points out, one of the best performing sustainable exchange traded funds in the past year had a large holding in mining company BHP. 

But that’s not necessarily a bad thing, says Da Costa. “It’s easy to think about mining companies as those that dig up the ground, tear down the trees and all those things. But they’re also the ones that are producing the lithium, for example, and all the rare earths that we need to transition from our dependence on fossil fuels. So I think one of the things you have to be really careful of is assuming that a company is one thing, good or bad.” 

“One of the things you have to be really careful of is assuming that a company is one thing, good or bad.” – Peres Da Costa

Of course, there’s no legislation to prevent you from investing in whatever you want – and if you don’t buy shares in a particular company, someone else probably will. Unless you have the financial power to buy a controlling stake, you won’t be able to control board decisions as a shareholder. But it doesn’t mean you can’t try. 

“If your objective is to have an impact in the world, then the levers that you have available to you are very different if you’re a consumer versus an institution, and you need to have a theory of change about how you have that impact,” Da Costa says.  

A theory of change is a conceptual model outlining the specific actions and interventions your investments will use to achieve the desired impact. In the case of sustainability and climate change, this means putting your money into renewables, divesting from fossil fuel companies, and being an active shareholder – paying attention to what your invested companies are doing, and wielding your shareholder voting power at AGMs (Annual General Meetings). 

One simple action that should be on every good global citizen’s to-do list is checking your super fund’s ethical position and investments, along with checking where your bank invests and if your power company uses renewables or coal and gas. 

Looking to your own values and ethics, and using those as a guide to what you will and won’t invest in, is probably your best personal guide for how to invest ethically.

For instance, does it bother you to earn dividends from companies involved in mining and fossil fuels, weapons manufacturing, supply chains that aren’t signatories to sustainability or anti-slavery regulation, and alcohol, tobacco, or unethical pharmaceutical companies? Are you willing to make trade-offs and invest in a company doing harm in one area but good in another? As Da Costa says, you can’t assume “a company is one thing, good or bad.” 

Whether you’re actively trading shares and avidly following financial news or just tinkering with your super investment options, the stock market will always be an ethical minefield. But with research and the knowledge of how to take control of your money and how it’s used, you can start investing more responsibly and purposefully. 


Life and Shares unpicks the share market so you can make decisions you’ll be proud of. Listen now on Spotify and Apple Podcasts.  

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The super loophole being exploited by the gig economy

Imagine what it must feel like not to receive compulsory superannuation – despite it being a mandated part of our employment landscape for more than three decades. For many Australian workers this is a reality.

The Super Guarantee legislates that employers have to pay super contributions of 11 per cent of an employee’s ordinary time earnings, regardless of whether they’re a casual or full time employee.

But the legislation that is meant to protect working rights falls short for an increasingly large group of workers.

We’re referring to the gig economy, which appeared out of nowhere around 2006 when Menulog launched Australia’s first online meal delivery service and has since grown nine-fold to employ as many as 250,000 workers across platforms such as Upwork, Fiverr, Uber and Airtasker.

While the system is providing Australians with flexibility, autonomy and options for an additional source of income, its participants are also being exploited. More than half of gig workers are under 35 and a similarly a large number are international students and migrants who can struggle to get a foothold onto the career ladder in Australia – sometimes due to language or cultural setbacks. It appears nearly two decades later, the super system appears to still be playing catch-up with a changing workforce.

Despite some contractors being eligible to be paid super if they meet the additional eligibility requirements, gig economy workers miss out on the same rights as most working Australians. These workers trade basic workplace entitlements, such as sick leave and holiday pay, for flexibility, and critically, they also miss out on the Superannuation Guarantee, despite the national mandate.

Scratch the surface, and it’s clear to see that a significant loophole exists in current labour force regulations, meaning that most gig workers are likely to be classified as independent contractors.

The superannuation system was built to ensure that Australians can retire comfortably without having to rely on the Government-funded Age Pension, taking significant pressure off government coffers so that funds can be diverted into health, education and other critical infrastructures.

Quite simply, it’s a crime not to pay super. The Australian Taxation Office clamps down on employers that don’t pay superannuation in full, or who fail to keep adequate records. The system works well, and is under constant review as reforms continue to make improvements solely aimed at growing our retirement nest egg.

But despite the removal of the $450 threshold so that workers earning even a small amount from an employer in a month are still eligible for super, the legislation hasn’t yet caught up with the gig economy, creating a deep chasm between the haves, and the have nots.

This is because most gig workers are paid per job, and not as part of a company’s payroll. In the eyes of the Australian Taxation Office, these workers are considered self-employed, or sole traders. As such, any super they put aside for themselves is a choice, rather than a legal requirement.

As a result, gig workers risk falling well short of the super they should have accrued during their working life, bringing about longer term concerns around financial security. For example, if someone worked in the industry for a decade, their super balance upon retirement would dip to $92,000 less than a minimum wage employee. Consequently, gig economy workers are more likely to rely solely on the government-funded Age Pension in retirement.

This disparity raises questions about current superannuation legislation, which doesn’t go far enough to provide protections for all workers.

While Industry Super chief Bernie Dean has made public calls for gig workers to be paid super so they can be self-sufficient in retirement, it has so far fallen on deaf ears.

Fair Work Legislation sets out to close loopholes by creating minimum standards for all workers and proposes a new definition of casual employment, but until all workers earn the same rate of super regardless of how they are employed, it doesn’t look to be all that fair.

So what is our responsibility to those caught in the gap?

Long term disparities about who is and isn’t entitled to Super raises serious questions about inequities in the system and how we consider all types of workers as part of our community and the economy.

While real change comes with policy and regulation, workers do bear some responsibility to prevent inequity falling on them. With many workers in the industry lacking practical information about their rights, education is paramount. Users of the gig economy should seek to better understand industry rules and their options, which starts by asking the right questions: What protections do I have by taking on this job? What are the risks involved? Am I setting up the right fund for myself? And how can I best think about my future self?

And in the meantime, the law might just catch up with consideration for all.

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Access to ethical advice is crucial

Better ethical approaches for individuals, businesses and organisations doesn’t just make moral sense. The financial benefits are massive, too.

It might seem a little ironic to take ethics advice from an intelligence agency that consciously deploys deception, yet it shows why access to ethical advice is vitally important. Indeed, we argue that the example of an ethics counsellor within ASIS demonstrates why every organisation should have (access to) an ethical adviser.

Ethics is often considered to be a personal or private activity, in which an individual makes decisions guided by an ethical code, compass or frame of reference. However, emerging technologies necessitate consideration of how ethics apply “at scale”.

Whether we are conscious of this (or not), ethical decisions are being made at the “back end” – or programming phase – but may not be visible until an outcome or decision, or user action, is reached at the other end of the process.

Miah Hammond-Errey describes in her book, Big Data, Emerging Technologies and Intelligence: National Security Disrupted, how “ethics at scale” is being driven by algorithms that seek to replicate human decision-making processes.

This includes unavoidable ethical dimensions, at increasing levels of speed, scope and depth – often in real time.

The concept of ethics at scale means that the context and culture of the companies and countries that created each algorithm, and the data they were trained on, increasingly shapes decisions at an individual, organisation and nation-state level.

Emerging technologies are likely to be integrated into work practices in response to the world itself becoming more complex. Yet, those same technologies may themselves make the ethical landscape even more complex and uncertain.

The three co-authors recently discussed the nexus of ethics, technology and intelligence, concluding there are three essential elements that must be acknowledged.

First, ethics matter. They are not an optional extra. They are not something to be “bolted on” to existing decision-making processes. Ethics matter: for our own personal sense of peace, to maximise the utility of new technologies, for social cohesion and its contribution to national security and as an expression of the values and principles we seek to uphold as a liberal democracy.

Second, there is a strong economic case for investing in the ethical infrastructure that underpins trust in and the legitimacy of our public and private national intuitions. A 10 per cent improvement in ethics in Australia is estimated to lead to an increase in the nation’s GDP of $45 billion per annum. This research also shows improving the ethical reputation of a business can lead to a 7 per cent increase in return on investment. A 10 per cent improvement in ethical behaviour is linked with a 2.7 to 6.6 per cent increase in wages.

Third, ethical challenges are only going to increase in depth, frequency and complexity as we integrate emerging technologies into our existing social, business and government structures. Examples of areas already presenting ethical risk include: using AI to summarise submissions to government, using algorithms to vary pricing for access to services for different customer segments or perhaps using new technologies to identify indicators of terrorist activity. That’s before we even get to novel applications employing neurotechnology such as brain computer interfaces.

Ethical challenges are, of course, not new. Current examples driven by new and emerging technologies include privacy intrusion, data access, ownership and use, increasing inequality and the impact of cyber physical systems.

However, an extant need for ethical rumination is, for now at least, a human endeavour.

As a senior leader of ASIS, with a background in the military, Major General Paul Symon (retd) strongly supported resourcing a (part-time) ethics counsellor. He was aware the act of cultivating agents, and the tradecraft involved, would inevitably demand moral enquiry by the most accomplished ASIS officers.

His belief was without a solid understanding of ethics, there was no standard against which the actions of the profession, or the choices of individuals, could be measured.

So, a relationship emerged with the Ethics Centre. A compact of sorts. Any officer facing an ethical dilemma was encouraged to speak confidentially to the ethics counsellor. The conversation and the moral reasoning were important.

General Symon guaranteed no career detriment to anyone who “opted out” of an activity so long as they had fleshed out their concerns with the ethics counsellor. Often, an officer’s concerns were allayed following discussion, and they proceeded with an activity knowing there was a justification both legally and ethically.

Perhaps if we’d had ethical advisers available across other institutions, we might have prevented some of the greatest moral failures of recent times, such as the pink batts deaths and robodebt.

If we had ethical advisers accessible to industry, then perhaps we’d have avoided the kind of misconduct revealed in multiple royal commissions looking into everything from banking and finance to the treatment of veterans to aged care.

We believe our work over years, including examples in defence and intelligence, demonstrates practical examples and the requirement to build our national capacity for ethical decision-making supported by sound, disinterested advice. That is one reason we support the establishment of an Australian Institute for Applied Ethics with the independence and reach needed to work with others in lifting our national capacity in this area.


Pledge your support for an Australian Institute of Applied Ethics. Sign your name at:

This article was originally published in The Canberra Times.

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The Ethics Institute: Helping Australia realise its full potential

It has been some three years since we posed a simple question: to what extent (if any) does ethics affect the economy?

The team we asked to answer that question was led by the economist, John O’Mahony of Deloitte Access Economics. After a year spent analysing the data, the answer was in. The quality of a nation’s ethical infrastructure has a massive impact on the economy. For Australia, a mere 10% improvement in ethics – across the nation – would produce an uplift on GDP of $45 billion per annum. Yes, that’s right, a decade later the accrued benefit would be $450 billion – and growing!

Some things are too good to be true. This is not one of them.

The massive economic impact is a product of a very simple formula: increased ethics=increased trust=lower costs and higher productivity. Increasing trust is the key. Not least because without it, every case for reform will either fall short or fail … no matter how compelling. Ordinary Australians going about their lives simply will not allow reform when they believe that the benefits and especially the burdens of change will be unfairly distributed. So it is that the incredible potential of our nation is held hostage to factors that are entirely within our control.

We invest billions in physical and technical infrastructure in the hope that it will lead to improvement in our lives. We invest almost nothing in the one form of infrastructure that determines how well these other investments will perform. That is, we invest precious little in our ethical infrastructure.

My first reaction to receiving the Deloitte Access Economics report was to try to engage with the Federal Government of the day. I thought that whatever one might think about ‘ethics’ as a concept, there could be no ignoring the economics. I was wrong. The message came back that the government was “positively not interested” in discussing the findings or their implications. I have met with rejection and (more often) indifference on many occasions over the past thirty years. This ranks at the top of my list of negative responses.

The Ethics Centre has always been resolutely apolitical. So, we cast around to find someone in the then Federal Opposition who might engage with the findings. And that is where the current Treasurer, Dr Jim Chalmers, comes in. He took the findings very seriously – so much so that he issued a further challenge to identify what specific measures would increase ethics by 10% and thus, produce the estimated economic uplift. That led to a second piece of work by Deloitte Access Economics – and nine months later, we received the second report. It is that report that has brought forth the current proposal to establish the world-first Australian Institute for Applied Ethics.

The proposed Institute will have two core functions: first, it will be a source of independent advice. Legal issues are referred to the Australian Law Reform Commission. Economic issues are sent to the Productivity Commission. As things stand, there is nowhere to refer the major ethical issues of our times. Second, the Institute will work with existing initiatives and institutions to improve the quality of decision making in all sectors of life and work in Australia. It is important to note here that the Institute will neither replace or displace what is already working well. The task will be to ‘amplify’ existing efforts. And where there is a gap, the Institute will stimulate the development of missing or broken ethical infrastructure.

Above all, such an Institute needs to be independent. That is why we are seeking to replicate the funding model that led to the establishment of the Grattan Institute – by establishing a capital base with a mixture of funds from the private sector and a one-off grant of $33.3 million from the Federal Government.

The economic case for making such an investment is undeniable. The research shows that better ethics will support higher wages and improved performance for companies. Better ethics also helps to alleviate cost of living pressures by challenging predatory pricing practices – and other conduct that is not controlled in a market dominated by oligopolies and consumers who find it hard to ‘shop around’.

But what most excites The Ethics Centre, and our founding partners at the University of NSW and the University of Sydney, is the chance for Australia to realise its potential to become one of the most just and prosperous democracies that the world has ever known. With our natural resources, vast reserves of clean energy and remarkable, diverse population – we have everything to gain … and nothing to lose by aspiring to be just a little bit better tomorrow than we have been today.

And that is why something truly remarkable has happened. ACOSS, the ACTU, BCA and AICD have all come together in a rare moment of accord. Support is growing across the Federal Parliament. Australians from all walks of life – are adding their names in support of an idea whose time has come.

All we need now is our national government to make an investment in a better Australia.


Pledge your support for an Australian Institute of Applied Ethics. Sign your name at:

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AI might pose a risk to humanity, but it could also transform it

It’s no secret that the world’s largest and most powerful tech companies, including Google, Amazon, Meta and OpenAI, have a single-minded focus on creating Artificial General Intelligence (AGI). Yet we currently know as little about what AGI might look like as we do about the risks that it might pose to humanity.

It is essential that debates around existential risk proceed with an urgency that tries to match or eclipse the speed of developments in the technology (and that is a tall order). However, we cannot afford to ignore other questions – such as the economic and political implications of AI and robotics for the world of work.

We have seen a glimmer of what is to come in the recent actors’ industrial action in Hollywood. While their ‘log of claims’ touched on a broad range of issues, a central concern related to the use of Generative AI. Part of that central concern focused on the need to receive equitable remuneration for the ongoing use of digital representations of real, analogue (flesh and blood) people. Yet, their deepest fear is that human actors will become entirely redundant – replaced by realistic avatars so well-crafted as to be indistinguishable from a living person.

Examples such as this easily polarise opinion about the general trajectory of change. At one end of the spectrum are the optimists who believe that technological innovation always leads to an overall increase in employment opportunities (just different ones). At the other end are the pessimists who think that, this time, the power of the technology is so great as to displace millions of people from paid employment.

I think that the consequences will be far more profound than the optimists believe. Driven by the inexorable logic of capitalism, I cannot conceive of any business choosing to forgo the efficiency gains that will be available to those who deploy machines instead of employing humans. When the cost of labour exceeds the cost of capital the lower cost option will always win in a competitive environment.

For the most part, past technical innovation has tended to displace the jobs of the working class – labourers, artisans, etc. This time around, the middle class will bear at least as much of the burden. Even if the optimists are correct, the ‘friction’ associated with change will be an abrasive social and political factor. And as any student of history knows, few political environments are more explosive than when the middle class is angry and resentful. And that is just part of the story. What happens to Australia’s tax base when our traditional reliance on taxing labour yields decreasing dividends? How will we fund the provision of essential government services? Will there be a move to taxing the means of production (automated systems), an increase in corporate taxes, a broadening of the consumption tax? Will any of this be possible when so many members of the community are feeling vulnerable? Will Australia introduce a Universal Basic Income – funded by a large chunk of the economic and financial dividends driven by automation?

None of this is far-fetched. Advanced technologies could lead to a resurgence of manufacturing in Australia – where our natural advantages in access to raw materials, cheap renewable energy and proximity to major population areas could see this nation become one of the most prosperous the world has ever known.

Can we imagine such a future in which the economy is driven by the most efficient deployment of capital and machines – rather than by productive humans? Can we imagine a society in which our meaning and worth is not related to having a job?

I do not mean to suggest that there will be a decline in the opportunity to spend time undertaking meaningful work. One can work without having ‘a job’; without being an employee. For as long as we value objects and experiences that bear the mark of a human maker, there will be opportunities to create such things (we already see the popularity of artisanal baking, brewing, distilling, etc.). There is likely to be a premium placed on those who care for others – bringing a uniquely human touch to the provision of such services. But it is also possible that much of this work will be unpaid or supported through barter of locally grown and made products (such as food, art, etc.).

Can we imagine such a society? Well, perhaps we do not need to. Societies of this kind have existed in the past. The Indigenous peoples of Australia did not have ‘jobs’, yet they lived rich and meaningful lives without being employed by anyone. The citizens of Ancient Athens experienced deep satisfaction in the quality of their civic engagement – freed to take on this work due to the labour of others bound by the pernicious bonds of slavery. Replace enslaved people with machines and might we then aspire to create a society just as extraordinary in its achievements?

We assume that our current estimation of what makes for ‘a good life’ cannot be surpassed. But what if we are stuck with a model that owes more to the demands of the industrial revolution than to any conception of what human flourishing might encompass?

Yes, we should worry about the existential threat that might be presented by AI. However, worrying about what might destroy us is only part of the story. The other part concerns what kind of new society we might need to build. This second part of the story is missing. It cannot be found anywhere in our political discourse. It cannot be found in the media. It cannot be found anywhere. The time has come to awaken our imaginations and for our leaders to draw us into a conversation about whom we might become.


Want to increase our ethical capacity to face the challenges of tomorrow? Pledge your support for an Australian Institute of Applied Ethics. Sign your name here.

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Ethics Explainer: Moral hazards

When individuals are able to avoid bearing the costs of their decisions, they can be inclined towards more risky and unethical behaviour.

Sailing across the open sea in a tall ship laden with trade goods is a risky business. All manner of misfortune can strike, from foul weather to uncharted shoals to piracy. Shipping businesses in the 19th century knew this only too well, so when the budding insurance industry started offering their services to underwrite the ships and cargo, and cover the costs should they experience misadventure, they jumped at the opportunity. 

But the insurance companies started to notice something peculiar: insured ships were more likely to meet with misfortune than ships that were uninsured. And it didn’t seem to be mere coincidence. Instead, it turned out that shipping companies covered by insurance tended to invest less in safety and were more inclined to make risky decisions, such as sailing into more dangerous waters to save time. After all, they had the safety net of insurance to bail them out should anything go awry. 

Naturally, the insurance companies were not impressed, and they soon coined a term for this phenomenon: “moral hazard”.  

Risky business

Moral hazard is usually defined as the propensity for the insured to take greater risks than they might otherwise take. So the owners of a building insured against fire damage might be less inclined to spend money on smoke alarms and extinguishers. Or an individual who insures their car against theft might be less inclined to invest in a more reliable car alarm. 

But it’s a concept that has applications beyond just insurance. 

Consider the banks that were bailed out following the 2008 collapse of the subprime mortgage market in the United States. Many were considered “too big to fail”, and it seems they knew it. Their belief that the government would bail them out rather than let them collapse gave the banks’ executives a greater incentive to take riskier bets. And when those bets didn’t pay off, it was the public that had to foot much of the bill for their reckless behaviour. 

There is also evidence that the existence of government emergency disaster relief, which helps cover the costs of things like floods or bushfires, might encourage people to build their homes in more risky locations, such as in overgrown bushland or coastal areas prone to cyclone or flood. 

What makes moral hazards “moral” is that they allow people to avoid taking responsibility for their actions. If they had to bear the full cost of their actions, then they would be more likely to act with greater caution. Things like insurance, disaster relief and bank bailouts all serve to shift the costs of a risky decision from the shoulders of the decision-maker onto others – sometimes placing the burden of that individual’s decision on the wider public.  

Perverse incentives

While the term “moral hazard” is typically restricted examples involving insurance, there is a general principle that applies across many domains of life. If we put people into a situation where they are able to offload the costs of their decisions onto others, then they are more inclined to entertain risks that they would otherwise avoid or engage in unethical behaviour. 

Like the salesperson working for a business they know will be closing in the near future might be more inclined to sell an inferior or faulty product to a customer, knowing that they won’t have to worry about dealing with warranty claims.  

This means there’s a double edge to moral hazards. One is born by the individual who has to resist the opportunity to shirk their personal responsibility. The other is born by those who create the circumstances that create the moral hazard in the first place. 

Consider a business that has a policy saying the last security guard to check whether the back door is locked is held responsible if there is a theft. That might give security guards an incentive to not check the back door as often, thus decreasing the chance that they are the last one to check it, but increasing the chance of theft. 

Insurance companies, governments and other decision-makers need to ensure that the policies and systems they put in place don’t create perverse incentives that steer people towards reckless or unethical behaviour. And if they are unable to eliminate moral hazards, they need to put in place other policies that provide oversight and accountability for decision making, and punish those who act unethically. 

Few systems or processes will be perfect, and we always require individuals to exercise their ethical judgement when acting within them. But the more we can avoid creating the conditions for moral hazards, the less incentives we’ll create for people to act unethically. 

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BFSO Young Ambassadors: Investing in our future leaders

In 2018 ethics became a household word in financial services, partly because of the Hayne Royal Commission which identified the unethical behaviours and cultures within the industry. While behavioural and cultural change starts with individuals, empowerment doesn’t come easy, particularly at the beginning of one’s career.

Aimed at supporting young professionals, the Banking and Financial Services Oath (BFSO) Young Ambassador Program encourages people early in their careers to adopt a strong ethical foundation in the banking and financial services industry. 

We sat down with three former BFSO alumni, Max Mennen (NAB), Michelle Lim (RBA), and Elle Griffin (CBA), to discuss the impact the program has had on them, and what ethics looks like in an industry that’s been through turmoil and has a responsibility to function above and beyond the legal requirements. 


TEC: What first drove you to apply for the BFSO program?

Max: My experience in banking up until I did the BFSO program was in a customer facing role and I was exposed to a lot of opinions about banks – why they’re flawed and their wrongdoings. And that wasn’t just from customers, that was just the general introduction that I had while working. 

The BFSO certainly aligned with me questioning these sorts of opinions that I’d heard, finding the truth to them and more so seeing how you can rectify [the behaviours that cause] those opinions. It helped me interrogate what work I was doing and how I could make it better. 

Elle: I wanted to make an impact outside of my day-to-day role and feel like I was contributing to something bigger than just the bank, but to the community. It also gave me a real responsibility to think about broader issues going into becoming a banker, that we all had a role to play in improving our profession. 

Michelle: Coming from a psychology background, I was really interested in contributing to understanding the culture and the conduct that led to all the issues discussed in the 2017 Hayne Royal Commission. I wanted to contribute to those discussions and hopefully be part of that cultural shift. 


TEC: Five years on from the Royal Commission, where do you see the role of the BFSO?

Elle: I have always strongly identified with the idea that the BFSO promotes that we are part of a profession, which means that we are more than just employees of our particular bank. Instead, being a professional means that you have competence, care and diligence about how you approach what it is that you do.  

I think that what the Hayne Royal Commission showed was that people didn’t approach banking from that kind of noble profession mindset and the BFSO fills that void for the industry. As long as people consider what we do as a profession, we’ll go a long way to avoiding those outcomes in the future. 

Max: I think the BFSO could be valued in any industry because what it mainly showed me was an insight into the value chain of what, in our case, the financial services sector provides. It has an impact on the broader economy, but certainly on everyday customers as well. It’s pretty easy to just view your job quite narrowly as the process that you play rather than looking at the impact of what you stand for and what the organisation does. It certainly gave me much better recognition for the role that financial services play and how they can do it better. 


TEC: Do you feel there’s more of an appetite for financial institutions to allow time for participating in programs like the BFSO?

Michelle: The BFSO gave me courage and made me feel empowered to lean into something that I was always interested in, which is social justice and equality and equity. It brings people that are like-minded together who are quite young and new in their career, and it gives them this sense of empowerment and courage to actually lean into what we value and what our principles are and then echo and extend that out and amplify that within our organisations and then beyond. 

When I started, five or six years ago, I was in the risk culture space and that was still quite new but now I’ve seen that space grow so much and there’s become a heavy focus into conduct and risk. I think organisations are really seeing the value of carving out dedicated time for ethical leadership and what that looks like, and mapping that back to my ethical framework for my organisation and what our purpose is. 


TEC: Has it impacted the way you behave long-term in your role?

Elle: I feel very fortunate to have done the program very early in my career because it gives you a worldview, and a really clear way to interpret who you are and the work that you do day to day working in the financial services sector. And it translates to any role that I’ve had in the past five years. It’s helped me realise that not only that you should feel comfortable to speak up, but that I’m required to speak up and I should be speaking up. 


TEC: What would you say to somebody wanting to apply to the BFSO?

Michelle: Give 110% and don’t be afraid to ask questions. And invest in the networks and relationships you’ll make. The biggest thing for me is the relationships. 

Max: I would say the impacts can be exponential and they’ll last with you. 


Applications for the 2024 BFSO Young Ambassador Program are now open until 15 March. Find out more here. 

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Political promises and the problem of ‘dirty hands’

The decision by the Albanese Government to amend the form of the ‘Stage Three Tax Cuts’ – in breach of a much-repeated election promise – has not only unleashed the predictable storm of criticism from the Federal Opposition. More seriously, it has once again raised the question of integrity in politics. Yet, this is a rare case where a broken promise is in the public interest.

The making and breaking of political promises have a special significance in democracies like Australia. Governments derive their legitimacy from the consent of the governed – and consent is meaningless if it is the product of misleading or deceptive information. That is why politicians who deliberately lie in order to secure power should be denied office. It is also why prospective governments should be extremely cautious when making risky promises.

Yet, to argue that ‘keeping promises’ is an essential aspect of building and maintaining trust and legitimacy does not entail that a promise must be kept under any and every circumstance. There may be times when it is literally impossible to keep one’s word – for example, when a government commits to build a facility in a specific location that is later destroyed in a flood. And then there are circumstances where the context is so fundamentally altered as to make the keeping of a promise an act of folly or worse, irresponsibility. President Zelensky is bound to have made many promises to the people of Ukraine prior to the Russian invasion – at least some of which it would be irresponsible to keep in the middle of a war that threatens the very existence of the State.

Some people – notably those who adopt consequentialist forms of ethical reasoning – will argue that a promise should always be broken if, by doing so, a superior outcome is achieved. Others – notably those who place a higher value on acting in conformance with duty (irrespective of the consequences) – will argue that promises should never be broken. I am not inclined to line up with the ‘purists’ on either side. Instead, I prefer an approach in there is acceptance – across the political spectrum – that:

  1. There is a clear presumption in favour of keeping promises.
  2. Promises may be broken, but with extreme reluctance, when genuinely in the public interest to do so. That is the breach cannot be justified because it advances the private political interests of an individual or party.
  3. Any breach must be only to the extent necessary to realise the public interest – and no more.
  4. Those who break a promise should publicly acknowledge that to do so is wrong and that they are responsible for this choice. That is, they should not seek to deny or lessen the ethical significance of their choice.

Let’s consider how these criteria might be applied in the case of the ‘Stage Three Tax Cuts’.

The key question concerns whether or not it is demonstrably in the public interest to amend the legislated package as it stands. This question cannot be answered by looking at the economic and social implications alone. There is a real risk that trust in government will be eroded – even amongst those who benefit from the changes. And that further erosion in the ‘ethical infrastructure’ of the nation harms us all – not least because of its own tangible economic effects. So, that fact must be weighed in the balance when evaluating the public interest. However, Australia’s ethical infrastructure is also weakened by widening inequality – and by a growing sense of desperation amongst those who feel that their struggles are as much a product of unfairness as they are of forces beyond anyone’s control.

We should never forget that the current cost of living crisis is a form of ethical failure. It was neither inevitable nor necessary. At its root lie the choices made by those who control the levers of economic and political power. As things stand, the community does not trust them to ensure an equitable distribution of burdens and benefits. That widespread popular sentiment is reinforced by daily experience. Ethics – which deals with the way in which choices shape the world we experience – lies at the heart of the current crisis.

So, if changes to the ‘Stage Three Tax Cuts’ can be shown to tilt the table in favour of a more fair and equal Australia, it will have a strong claim to be in the public interest – not least by demonstrating that power can be exercised for the good of all rather than the influential few. Thus, some measure of trust and democratic legitimacy might be restored.

Two final points. First, even with the changes, every Australian taxpayer will continue to be better off than the day before the changes come into effect. To that extent, the policy satisfies the third of the conditions listed above.

Which brings me to the final test: will the Prime Minister and his colleagues accept that the breaking of a political promise is wrong-in-itself – even if necessary to advance the public interest? That would be the brave thing to do. It would involve Anthony Albanese in acknowledging one of the toughest problems in political philosophy – the problem of ‘dirty hands’. This is when a person of principle, as Albanese clearly is, decides to accept the burden of violating their own, deepest ethical sense for the good of others. Then their sense of the moral injury they do to themselves exceeds the bounds of all criticism directed to them by others. They are wounded – and they let us see this.

I believe Anthony Albanese when he says that ‘his word is his bond’. Now, he must own this commitment and acknowledge the cost he and his government must bear in serving the public interest. That will not spare him the pointed criticism of political opponents or of those who sincerely feel their trust betrayed or their interests diminished. However, that honest reckoning is the sacrifice a good person must sometimes make in order better to serve the people.


Image by Mick Tsikas, AAP Photo

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