Ethical financial reform – austerity measures

The front page headlines of the West Australian newspaper over the last two days have highlighted concerns about the difficulties in maintaining top class treatment in the cancer unit of Princess Margret Hospital in Perth

The concerns regarding the treatment of children at PMH can be argued as resulting from the policy of economic rationalism that Australian governments have adopted over recent decades that result in the preoccupation with short term financial outcomes rather than long term social development to improve wellbeing.? The pressure on health budgets, the failure to attract or develop specialist doctors and nurses and delays in developing new facilities all are consequences of such policies.

While the situation in Australia perhaps cannot be compared to the ‘austerity’ measures being forced into many countries in Europe, the failure to keep pace with the demands of population growth particularly in health spending can be likened to a form of economic austerity that has an impact especially on the wellbeing of those marginalised in our society.? Having said that there is some pressure in Australia to adopt similar measures to the EU It is possible to draw some link between these local concerns and the call for ethical financial reform and the end to the ‘cult of money’ that Pope Francis made several weeks ago

The Global financial crisis that precipitated the ongoing worldwide economic crisis has resulted poorer wellbeing for many people.? The austerity measures in many countries have resulted in cuts in social spending being enforced by World Bank policy for the granting of financial resource packages.? The effect is that “Suicide is on the rise; basic hospital supplies are missing; potentially life-saving surgeries are delayed; the rate of new HIV infections increases; drug shortages are ubiquitous; the prevalence of mental illness spikes.” according to Dr. Adam Gaffney

Yet in the past four years the EU had spent some 4.5 trillion Euros – 37% of the EU’s GDP – bailing out the financial industry, while government spending on social protection had been subjected to austerity measures.

Considering that the current situation was avoidable, according to the US Governments Financial Crisis Inquiry; it seems remarkable that there appears to have been little impact on global ethical financial reform.? The financial crisis was caused by failures in corporate governance, risky investment, little transparency and a ‘systemic breakdown in accountability and ethics’

Yet policies for new economic plans under austerity measures are biased to protect large companies and capital-holders rather than those at most risk of loss of their democratic and human rights.

We are still worshiping at the altar of the ‘golden calf’ that views individuals as consumer goods that are subject to free market pressures.




The experience of one small European economy does give us some hope for sensible ethical financial reform and provides a good example of the effectiveness of the principle of subsidiarity.



The majority of the population in Iceland rejected the IMF’s rescue package that would have imposed austerity measures and refused to be accountable for the unethical behaviour of a few bankers.? Instead the population embraced the suggestion of its government to increase social protection and stimulate employment growth which resulted in the maintenance of the health and wellbeing of the population despite external economic sanctions. (

Financial crisis, austerity, and health in Europe Karanikolos etal 2013)

In adopting such a stance the dignity of the individual is promoted through concern for the relationships they have with others and the systems within which they operate.? Giving hope for the Pope’s message of reform.


Updated: June 10, 2013 — 1:43 am
Justice, Ecology and Development Office © 2014 Frontier Theme