Distrust: A Growing Crisis in an Election Year

Introduction

Distrust is emerging as a defining societal challenge in Australia, destabilising institutions, undermining corporate reputations, and influencing political elections. It has permeated every level of society, creating a fragile nation where trust is more elusive than ever.

And never has this been more important than in a federal election year.

Australians are becoming more distrusting than trusting, less confident and optimistic, and increasingly anxious and depressed. This growing fragility is reflected in rising theft and violence, struggling schools, a health system in crisis, and widespread financial pressures, including housing affordability, mortgage stress, and the cost-of-living crisis. These societal pressures fuel division and a growing sense of disconnection.

Nowhere is this fragility more evident than in the reputational collapses of Woolworths and Coles, whose decline from Australia’s most trusted to most distrusted brands epitomises the broader impacts of distrust.

What are the drivers and material consequences of distrust, what is its role in shaping corporate and political landscapes, and what is the challenging path to recovery?

The Drivers of Distrust in Australia

Various factors, including rising economic inequality, persistent cost-of-living pressures, and perceived moral blindness in institutional leadership, have fuelled distrust in Australia.

The pandemic served as a crucible, magnifying public expectations for ethical conduct, transparency, and prioritisation of community welfare. Companies like Woolworths and Coles were centre stage. The CEOs of the two supermarket giants stepped up in the media and the aisles, promising to save Australia. They achieved record trust for their pandemic initiatives, but everything changed when the cost-of-living crisis hit Australia. Both brands failed to maintain trust amidst allegations of unaffordable pricing and profit-driven strategies—critical drivers of distrust.

In 2022 and 2023, Woolworths and Coles were Australia's most trusted and second-most trusted brands. However, by October 2024, Woolworths was the most distrusted brand, followed by Coles as the second-most distrusted brand. This represents a fall of 239 places for Woolworths from its peak (last recorded in the 12 months to November 2023) and 237 places for Coles (peak last recorded in the 12 months to August 2023).

In October 2024, Woolworths recorded its highest level of distrust—the highest level of any brand since Roy Morgan commenced the research in late 2017—replacing Optus as the most distrusted brand in Australia. Coles recorded the second highest level of distrust on record.

This fall from grace for both supermarket majors highlights the volatile nature of distrust and, given that customer loyalty is simply another name for trust, its profound influence on consumer behaviour and brand loyalty.

Moral Blindness

Moral blindness is a pervasive ethical failing in which individuals and organisations fail to recognise or acknowledge the ethical dimensions and broader consequences of their actions. This phenomenon extends beyond mere lapses in judgment and reflects a systemic inability to align actions with moral and ethical standards.

Corporate cultures often prioritise profit maximisation and competitive pressures, which can lead to ethical compromises, moral failures, and soaring distrust. The moral blindness exhibited by leaders at Qantas, Harvey Norman, PWC, AMP, Rio Tinto, and QBE, for example, has contributed to national fragility. This is a significant issue that represents a major challenge for the Australian economy.

Moral blindness is not confined to overt actions; it also encompasses acts of omission. CEOs and corporate leaders who practice 'omission' by turning a blind eye or looking the other way are as culpable as those who actively engage in unethical behaviour. This passive complicity is equally damaging, perpetuating a culture where unethical practices can flourish unchecked. For example, leaders who ignore whistleblower reports or fail to address known ethical breaches contribute to a moral environment where wrongdoing is implicitly condoned.

Why Distrust Matters

Distrust matters because it has material and far-reaching consequences. Brands that become distrusted often experience immediate financial repercussions, such as declining market capitalisation and customer loyalty. While trust creates loyalty, distrust can drive customers into the welcoming arms of more trusted brands in their category. The reputational fall of Woolworths and Coles is a powerful reminder of the fragility of trust in today’s economic environment, with distrusted brands subject to heightened scrutiny by corporate watchdogs, renewed reputational attacks, government and policy interventions, and prolonged recovery periods.

Data from Roy Morgan reveals that distrust influences not just current customers but also ex-customers, potential customers, employees, and investors. A high Net Distrust Score (NDS) signals entrenched negative sentiment that can persist for years, foreshadowing long-term challenges.

Medibank’s market value fell by $1.6 billion after a highly publicised data breach, AMP’s market capitalisation fell by 80% following the Banking Royal Commission, and Facebook lost $120 billion in market value after the Cambridge Analytica scandal. These losses were among the largest in corporate history and led to significant changes in the marketing ecosystem.

Similarly, on September 22, 2022, Optus suffered a cyber-attack that accessed the personal data of 11 million customers. Virtually overnight, Optus became Australia's most distrusted telecommunications company. By December, its Net Distrust Score had worsened fivefold, and it had lost 15 places in the rankings. By 2023, it was Australia’s most distrusted brand.

Optus reportedly lost more than a million customers to its competitors, which, if accurate, amounts to an estimated $540 million. In 2025, Optus is still struggling to emerge from the top five most distrusted brands.

Distrust in the Political Arena

The implications of distrust extend beyond the corporate sector into the political arena. In a Federal Election year, distrust can erode public confidence in institutions and leaders, shaping voter behaviour and polarising public opinion. In short, it can determine who wins and loses the election.

Brexit provides a compelling example. The UK referendum campaign was marked by widespread distrust of both official and unofficial narratives. Millions of disenfranchised citizens voted to leave the European Union—not as a well-reasoned policy decision but as an emotional backlash against perceived authority and elitism. This distrust of political institutions, combined with a perceived lack of transparency, led to a highly polarised electorate and a result that continued to reverberate in British politics long after the initial vote.

The?United States?provides another vivid example, as demonstrated by Donald Trump's re-election. His support base is anchored in anti-establishment, nationalist, and conservative ideologies, often accompanied by a rejection of traditional political norms. Many Americans see themselves as victims of globalisation and progressive policies, and Trump's rhetoric resonates with those who deeply distrust the so-called Washington elite.

Recent Roy Morgan?research findings provide a compelling example of this distrust backlash in Australia, where more than one million citizens feel disillusioned, disaffected, and disconnected from government and authority. This group is indicative of a broader social and political sentiment growing across the country and of a global movement that has profound implications for the future of democracy.

In such a climate, traditional political messaging fails, and trust-based appeals become increasingly critical for building electoral legitimacy and uniting a divided population. The ALP and the Coalition will confront this challenge within months.

The Complex Path to Recovery

Recovering from distrust is a complex and protracted process. Corporate leaders, in particular, often imagine an overly optimistic recovery timeline due to their short-term goal-setting and remuneration framework. In the distrust ecosystem, there is little room for optimism.

Roy Morgan’s modelling of 15 Australian brands that suffered reputational brand shocks highlights the asymmetric recovery trajectory. For instance, Qantas showed near-average recovery in the first nine months after a historic reputational low point. But new and renewed controversies dramatically reversed its recovery.

Continuous tracking of all 15 brands shows that 92% had not fully recovered in the first 12 months, 75% had not recovered after 24 months, and at 48 months, half were still struggling to recover. Even after five years, 25% of brands remained deeply tarnished, demonstrating the prolonged and unpredictable nature of recovery from distrust.

What are the lessons from those who did manage to recover over an optimal period?

Strategies for Rebuilding Trust

1. Transparent Communication Channels Establish open, two-way communication to surface issues early and proactively address them. When the crisis strikes, immediately tell the truth. By all means, collect feedback from current customers and canvass ex-customers, potential customers, and other stakeholders. This broader engagement helps identify emerging recovery disruptions before they escalate and demonstrates a commitment to transparency.

2. Ethical Leadership and Governance Implement strong, ethical decision-making at the executive and board levels to safeguard against moral blindness. Prioritise long-term stakeholder value over short-term gains, embedding ethical considerations into every decision-making process to reinforce trust.

3. Culture of Accountability Incorporate distrust into the board’s risk register to ensure it is treated as a strategic concern. By recognising and learning from missteps, foster a culture that values accountability. This will help solidify trust over time and prepare the organisation for future challenges.

4. Comprehensive Sentiment Analysis Traditional metrics like Net Promoter Score (NPS) fail to capture negative sentiment, including distrust. More sophisticated frameworks, such as the Net Distrust Score (NDS), provide a fuller picture of stakeholder perceptions. Measuring distrust provides an ‘early warning system’ to identify and manage nascent crises.

5. Independent Risk Audits and Reviews Conduct periodic independent risk audits to gain impartial insights and help identify risks and blind spots. This external perspective ensures adherence to ethical standards and enhances stakeholder confidence in the company’s reputational governance.

6. Proactive Trust Building View distrust not as a reactive measure but as a core business strategy. This involves setting precise trust measurement and improvement objectives, regularly reviewing progress, and adjusting approaches as needed. By taking a forward-looking, data-driven approach, companies can rebuild and sustain trust over the long term.

Conclusion

Distrust represents a significant challenge for Australia’s corporate, social, and political leaders. Its impacts are profound, affecting everything from consumer behaviour to electoral outcomes.

Yet, with sustained effort and a commitment to transparency, ethical leadership, and proactive engagement, it is possible to navigate the complexities of distrust and rebuild a foundation of trust.

As Optus, Qantas, Woolworths and Coles work to recover, their journeys will serve as critical case studies in understanding and addressing one of Australia’s most pressing societal issues.

But will Australia’s politicians heed the warning signs?