Trillions of tax dollars had been spent propping up the financial sector after the global economic crisis but chances were being lost to act against underlying greed and dishonesty, former finance minister and deputy prime minister Dr Michael Cullen warned yesterday.
Dr Cullen told more than 300 university graduates in arts, law, music and theology in his graduation address at the Dunedin Town Hall that, throughout the world, trillions of dollars had been "sunk into propping up the financial sector and stimulating economic demand" in order to avoid a depression.
"The vast bulk of this will fall as a burden on future taxpayers.
"Yet so far there is no real sign that there will be an effective, concerted international effort to address the greed, dishonesty, and ruthless and wilful disregard for risk and the wider good which led to this financial crisis.
"Many of the leading culprits have exited with handsome severance packages.
"There has been talk of reform but little real action and much of that misdirected.
"And as the world breathes a sigh of relief and passes on from the crisis the impetus for fundamental change will be lost."
Future leaders of the financial sector were likely to conclude that, ultimately, governments would commit taxpayers "to rescue them from their folly and greed, if need be, yet again".
Dr Cullen, who also received an honorary doctor of laws degree yesterday, had asked earlier whether anything was learned from the study of history.
To answer "no" was to risk confessing to a lack of usefulness "compared to such supposed contributors to the common good as international bankers, large corporate tax lawyers, or breakfast TV show hosts".
The actual answer was "yes and no", as the recent financial crisis showed.
Faced with a financial crisis on the scale which caused the Great Depression of the 1930s, governments and monetary authorities had shown through their reaction that they had learned from the contractionary policy mistakes of the 1930s.
Expansionary measures had been adopted which were slowly restoring confidence, and the human damage had been "incomparably less" than in the 1930s.
Nevertheless it seemed that not enough had been learned from the crisis when it came to making fundamental changes, he said.
University academics should also be playing "a stronger role in public debate on the great issues of our time".
It was "bizarre", for example, that the media seldom approached university economists for commentary, nearly always preferring bank economists who were often far from impartial observers.
The fact that all too often the informed views of those in academia were either not listened to, or discarded, was all the more reason to assert the university's role.
"There can be little doubt that public policy in areas as diverse as law and order and national standards in education would be more effective if that were the case."
Dr Cullen said that, as a former historian, he was "not just honoured but also tickled" by the idea he had just become the first person in New Zealand to receive a law degree after being the Attorney-general, the titular head of the legal profession.