Monday, February 27, 2023

Push for inquiry into consulting firms after PwC tax leaks

 Twitter Barbara Pocock

Push for inquiry into consulting firms after PwC tax leaks

Edmund TadrosProfessional services editor

The Greens will push for a Senate inquiry into the way the federal government uses consultants over concern about the PwC tax leaks scandal and the big four consulting firm’s inability to explain why it buried a damning report into the unlawful robo-debt scheme.

Any such inquiry, which will require the support of one of the major parties to be established, would set off alarm bells across the consulting industry.

Greens senator Barbara Pocock is pushing for an inquiry into the Commonwealth’s use of consulting firms. Alex Ellinghausen

Major firms such as KPMG and McKinsey have already begun shedding jobs amid a “go-slow” on buying services by federal agencies ahead of the May budget and also as corporate clients pull back on their consulting spend.

Greens senator Barbara Pocock wants to examine how the Commonwealth manages any conflicts of interests, breaches of contract and other unethical behaviour by the consulting firms it hires. The terms of reference, approved by the Greens party room, will also seek to examine the type of work consultants should do and any associated “implications for public administration and finance”.

“The PwC tax leaks and the robo-debt issue are sending out signals that really require investigation. Are they the tip of the iceberg or are they one-off problems?” Senator Pocock said.

“We want this inquiry to prevent the infantilising of the Australia public sector. We need to know more about what these big consultancies are doing, their effect on the public sector and their conflicts of interests.”

Senator Pocock wants to have any inquiry established to be heard by the Senate standing committees on finance and public administration, of which she is a member.

Public service skills

In addition to the PwC cases, other reviews and investigations have highlighted growing concerns around the use of consultants by the federal government, including the high cost of external advisers and the associated frequent cost overruns, and the deskilling of the public service.

The government is already examining a way to cut its $2 billion annual consulting bill as part of a plan to beef up the skills and capability of the public service. One option being canvassed is creating a cut-price in-house consulting service.

Senator Pocock said PwC had escaped with a “tap on their reputational wrist” after between 20 and 30 PwC partners and staff were involved in sharing confidential government tax policy obtained by former PwC star Peter Collins.

This came as the royal commissioner investigating robo-debt suggested a “nod and a wink” may have been given to bury a damning PwC report into the unlawful scheme, which eventually netted $750 million in Centrelink debts and was blamed for several suicides.

The last inquiry into the use of consultants by the Commonwealth, held during the Morrison government’s tenure, heard the Department of Finance struggled to even define the term “consultant” and that the AusTender contract tracking system was shown to be incapable of providing a reliable picture of the way public money was spent on external advisers and workers.

That inquiry also revealed that the public-sector arms of the big four consulting firms were increasingly used to carry out work traditionally doing by the public sector. The previous Coalition government was unapologetic about its extensive use of external contractors and consultants because it allowed the size of the public sector to be pared back.

Greens’ proposed terms of reference

An inquiry into the administration of consulting services provided for the Australian government, with particular reference to:

  1. The management of conflicts of interest by consultants;
  2. Measures to prevent conflicts of interest, breaches of contracts or any other unethical behaviour by consultants;
  3. Enforcement measures taken in response to inadequate management of conflicts of interest, breaches of contracts or any other unethical behaviour by consultants;
  4. The evaluation and management of risks to the administration of public policy arising from the engagement of consultants;
  5. The transparency of work undertaken by consultants and the accountability of consultants for this work;
  6. The appropriate scope of public administrative work let to consultants and its implications for public administration and finance;
  7. Any other related matters.

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Edmund Tadros leads our coverage of the professional services sector. He is based in our Sydney newsroom. Connect with Edmund on Twitter. Email Edmund at