Assistant Treasury Minister Andrew Leigh spoke at Transparency International Australia on Aug. 30, addressing how corruption detrimentally impacts the economy.
Mr. Leigh spoke of how corruption harms the Australian economy, and without a concerted effort to combat the issue, Australia faces lower investment, a weaker health system, and higher business costs.
He said corruption could impair new businesses from starting up, which has a flow-on effect limiting innovation and competition.
“If bribes are the price of entry, then only those who can afford to pay a bribe ever have the opportunity to get started. Investing in new ideas takes time and money—money that could be spent convincing officials to grant a contract or block a competitor’s proposal,” he said.
Economic Costs of Corruption
In Minister Leigh’s speech, he outlined the economic costs associated with corruption.
Infrastructure costs could increase by 10 to 30 percent, resulting in substandard facilities, higher maintenance costs, and reduced productivity.
Healthcare outcomes could drop, and lives could be lost with the financial cost of fraud. In 2015, a published study estimated the global cost of health fraud to be $455 billion.
On foreign investment, Mr. Leigh said corruption made it risky for businesses to enter a country. He likened it to a tax on investment and that it negatively impacted productivity growth.
What is the Corruption Perception Index?
Transparency International is a global non-governmental organisation dedicated to combating corruption and promoting transparency, accountability, and integrity across governments, businesses, and societies.The organisation compiles a Corruption Perceptions Index (CPI) annually, which is a global ranking system that assesses the perceived levels of corruption in countries around the world, with a country given a rating of 0 (highly corrupt) to 100 (very clean).
This was an improvement from 2021’s 18th position and is due in part to the introduction of the National Anti-Corruption Commission.
