ABC Treasurer Jim Chalmers furious former PwC partner leaked confidential government briefings
Treasurer slams PwC tax leak as ‘shocking breach of trust’
Federal Treasurer Jim Chalmers accused the nation’s largest accounting firm, PwC, of a “shocking breach of trust” after certain partners and staff leaked confidential information obtained while advising the government on measures to combat tax avoidance.
Dr Chalmers said the PwC partners who shared the secret information with clients and prospective clients had put at risk the established practice of government consulting business experts when developing policy.
Federal treasurer Jim Chalmers has criticised PwC over a tax leak. Alex Ellinghausen
The Treasurer said he was “absolutely furious, absolutely ropeable” and vowed to implement recommendations effectively ignored by the previous Coalition government to beef up the powers of the Tax Practitioners Board (TPB) to police the nation’s tax advisers.
“This is a shocking breach of trust, an appalling breach of trust,” he said. “And as a government that wants to be consultative where we can, it puts that sort of consultation at risk. It puts the quality of economic decision-making and policymaking at risk as well.”
The TPB terminated the registration of PwC’s former head of international tax, Peter Collins, as a tax agent after a lengthy investigation found he had shared secret information about the government’s tax plans to other staff at PwC despite signing a series of confidentiality agreements from 2013 to 2018.
PwC was also found to have failed to regulate other partners and staff who knew the confidential information was going to be used to help clients sidestep new tax laws and market to new clients. The firm was ordered to train relevant partners and staff on how to handle conflicts of interest.
Seeking advice
Dr Chalmers said he met with Assistant Treasurer Stephen Jones on Wednesday morning about the matter and asked for advice from the Treasury, the Board of Tax and the Tax Office about “any additional steps that we should be taking to protect the integrity of these processes”.
The Treasurer has also asked officials to examine whether the PwC breaches were a one-off or part of a pattern of behaviour.
“We want consultation to lead to better policy, not to lead to more profits for the people who are helping us with the consultation,” he said.
Experts in taxation and other policy areas play a key role in helping the government of the day develop laws that are effective.
“There is no consultation without trust, and we want to be able to consult in a meaningful way changes to the tax system are in prospect ... and [the] actions that we’ve seen alleged and reported cut across that,” he said.
Dr Chalmers said the consultation process was “absolutely essential” to good government and said he was seeking advice him on how the government could implement recommendations from the 2019 review into the TPB led by tax expert Keith James.
Former assistant treasurer Michael Sukkar on Tuesday rejected calls for the government to stop consulting PwC on tax policy after the breaches, saying that disciplinary action should be targeted at individuals rather than individual firms.
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Sukkar dismisses calls to sanction PwC over leaking scandal
Former assistant treasurer Michael Sukkar has rejected calls for the government to stop consulting PwC on tax policy after breaches of confidentiality by PwC partners, saying that disciplinary action should be targeted at individuals rather than the big four firm.
Mr Sukkar, who worked for PwC in 2005 to 2006, oversaw the cementing of the firm as the government’s dominant outside adviser on tax policy during the three years he was assistant treasurer until May last year.
Former assistant treasurer and PwC alumni Michael Sukkar.
PwC’s former head of international tax, Peter Collins, was deregistered by the Tax Practitioners Board on December 22 for sharing confidential documents detailing government tax policy plans with other PwC personnel, who in turn shared the information with existing clients and used it to win new clients.
The news of the confidentiality breach has sent shockwaves through the accounting profession as well as Canberra.
Assistant Treasurer Stephen Jones warned on Monday that the government might rethink its approach to consulting tax professionals. Greens senator Barbara Pocock on Tuesday called for a review of government use of big four consulting firms.
But Mr Sukkar dismissed suggestions that PwC should be sanctioned beyond the TPB’s order that the firm conduct training sessions for its staff to recognise conflicts of interest.
“Sanctions administered by the TPB are rightly imposed against individual tax practitioners, as has occurred here,” he told The Australian Financial Review in a text statement.
The decision to deregister the PwC partner for two years was a very serious outcome, he said.
Major appointments
“I am pleased that the former Coalition government took steps to strengthen the independence and role of the TPB, which has helped facilitate this action,” Mr Sukkar said.
In his three years as assistant treasurer, Mr Sukkar oversaw the appointment of PwC partner Christina Sahyoun as CEO of the Board of Taxation, where PwC special counsel Chris Vanderkley also sits.
In addition, four PwC partners – Steve Ford, Nick Houseman, Hayden Scott and Ken Woo – are on the Board of Taxation’s 48-member advisory panel. PwC and KPMG have the largest contingent on the panel.
At the Tax Practitioners Board, Mr Sukkar oversaw the appointment of two former PwC partners, Peter Hogan and Judy Sullivan, to the eight-member board, while a string of PwC personnel has been seconded to work for Treasury.
PwC did not respond to questions about the extent of its work with the government, or steps it would take to repair its battered image.
The firm does extensive advisory work for the federal government. In the 2022 financial year, PwC also entered into contracts worth $329 million across the government, up from $208 million in the previous year.
The TPB report refers to multiple PwC partners and personnel with confidentiality agreements and on secondment: “Despite the existence of signed CAs and secondment agreements by particular PwC partners and personnel specifying that the information could not be shared without prior approval from Treasury ... some of the confidential information was shared with other PwC personnel who had not been authorised to receive the information and had not signed CAs.”
The TPB found that: “In the circumstances, PwC would have or should have been aware of the perceived and actual conflict of interest. This extended to sharing the information with existing clients and potential clients of PwC.”
