Despite record-breaking penalties, corporate misconduct continues unchecked, suggesting fines alone are failing to reform big business.Carl Rhodesreports.

WHENOPTUSwasfined$100 million last month by the Federal Court of Australia for exploiting vulnerable customers,Australian Competition and Consumer Commission (ACCC) deputy chairCatriona Lowedeclared:

Just weeks earlier, Australian Securities and Investments Commission(ASIC) chairJoe Longostruck a similar tone whenANZBank was hit with$240 millionin penalties for lying to government and cheating customers:

ANZ and Qantas prove that when corporate greed trumps fairness and equality, democracy itself is at risk.

In August,Qantasreceived a record$90 millionfine for unlawfully terminating more than 1,800 ground workers. Delivering the ruling, Federal Court JusticeMichael Leesaid it would send a message to Qantas and other well-resourced employers.

Given the scale and frequency of theserecord-breaking fines, it is worth asking: what message is actually getting through? It certainly doesnt seem like a deterrent.

Message not received

If fines were meant to keep corporate Australia on the straight and narrow, theyre failing.

Look at last years messages:

• BHP paid $23.7 billionfor environmental devastation in Brazil;

• SkyCity Adelaide was slugged $67 millionfor money laundering breaches;

• Macquarie Bank copped $10 millionfor failing to stop fraud on customer accounts; and

• Mercer Superannuation paid $11.3 millionfor greenwashing its sustainable investments.

The common thread? There are people working in Australias largest corporations who are willing to lie, cheat and steal for profit. Heads rolled, to be sure, with various leadership shake-ups resulting from the scandals, but none of these scandals resulted in any criminal charges being held up.

Between 2020 and 2024, 369 corporate fines were issued in Australia, amounting to a total of just under $30 billion. The vast majority were for breaches related to the environment, consumer protection, safety, financial management, employment and competition. The fines are significant, but the scandals continue to mount.

So, whats the real message? For significant parts of corporate Australia, breaking the law still looks like a cost of doing business. It is a hefty cost, but apparently it is one worth paying for ensuring that no structural changes are made to the system in which the guilty corporations operate.

As policymakers begin to confront inequality, the response from corporate Australia reveals a telling divide.

The trust deficit

If the intended but unheard message to corporations is deterrence, there is an unintended message to the public that is being heard loud and clear. And it is something far more corrosive: that big business cannot be trusted.

Australians trust in big business is not only low, itsgetting worse. This is not just because some companies break the rules, it is because the system tolerates it. Even companies that play by the rules risk being tarnished by association. If misconduct is met only with fines and not with meaningful reform or accountability, then public confidence will continue to decline.

Restoring trust will require more than penalties; it will demand a cultural shift in how business sees its role in society. Sadly, that does not seem imminent.

Corporate resistance

When it comes to regulating corporate behaviour, the response from the business community, at least insofar as they are represented by theBusiness Council of Australia, is that productivity growth demands that we have less regulation.

The Council calls compliance a red tape burden and earlier this year, they demanded a 25 per cent reduction in the cost of regulation by 2030.

Reducing unnecessary bureaucracy is sensible. But as recent fines show, regulation is essential to keep corporations aligned with legal and community expectations. If companies cannot do the right thing without strict laws, they only have themselves to blame. Pointing the finger at government is tantamount to avoiding that responsibility.

This stance echoes theBusiness Councils responseto the Australian Law Reform Commissions2020 reviewof corporate criminal responsibility, where they argued regulation should align with economic growth objectives. Translation? If compliance slows profit, downgrade the rules. By implication, some wrongdoing is an acceptable price for progress.

The bottom line

Businesses can do better and many already are. But lasting change requires more than treating penalties, no matter how large, as an accounting expense. It will take leadership, transparency and a genuine commitment to doing the right thing, not just the profitable thing.

Until that message gets through, trust will keep eroding and so will the social license to operate.

Carl Rhodesis Professor of Business and Society at the University of Technology, Sydney. He has written severalbookson the relationship between liberal democracy and contemporary capitalism. You can follow him on X/Twitter@ProfCarlRhodes.

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