Taxpayer bonanza — Luke Sayers’ private company given $6.26m in Federal contractsin just 24 months. Source: AusTender. Graphic: The Klaxon
Cate Sayers, Luke’s wife, made headlineslast year after she appeared in political advertisements spruiking then Federal Treasurer Josh Frydenberg for re-election
You don’t Sayers? PWC Mini-Me in $6m Gov’t bonanza
Australian government refers PwC tax leaks scandal to police
Treasury refers PwC tax leaks scandal to Federal Police
Treasury has referred the PwC tax leaks scandal to the Australian Federal Police to consider opening a criminal investigation.
Treasury secretary Steven Kennedy said in a statement late Wednesday that PwC’s head of international tax, Peter Collins, improperly used confidential Commonwealth information.
“PwC Australia’s former head of international tax, Mr Peter Collins, improperly used confidential Commonwealth information,” Mr Kennedy says in the statement.
“The emails that the Tax Practitioners Board tabled in Parliament on 2 May 2023 highlighted the significant extent of the unauthorised disclosure of confidential Commonwealth information and the wide range of individuals within PwC who were directly and indirectly privy to the confidential information,” Dr Kennedy said.
“In light of these recent revelations and the seriousness of this misconduct, the Treasury has referred the matter to the Australian Federal Police to consider commencement of a criminal investigation.”
More to come.
Exclusive
PwC advised Treasury against a tax adviser crackdown
Treasury appointed a PwC leader who has since stepped down over the firm’s tax leaks scandal to advise on cracking down on the cash economy, including on how to deal with aggressive tax advisers.
Pete Calleja, who headed PwC’s huge financial services division, appears in emails obtained by the Senate this month which show the firm used confidential government information obtained by former partner Peter Collins to win new clients.
PwC partner Pete Calleja
In February 2019, Mr Calleja joined ATO Second Commissioner Jeremy Hirschhorn and the head of Treasury’s revenue group, Maryanne Mrakovic, on the nine-member Black Economy Advisory Board (BEAB) which advised the government on how to tackle the shadow economy.
They considered earlier recommendations on whether companies and advisers involved in hyper aggressive tax schemes should be barred from government contracts.
This was not implemented. Nor was a 2017 recommendation that suppliers be required to have a good tax and governance record, which has similarities with the ethical conduct test which the government introduced this week in response to the PwC scandal.
In mid-2018 the Tax Office obtained internal PwC emails which showed that Mr Collins breached three confidentiality agreements he signed with Treasury between 2013 and early 2018.
PwC used what Mr Collins learned to win new clients who were assured that the firm had workarounds for the new tax avoidance laws which Mr Collins was helping the government to fashion.
After the Senate published a selection of redacted emails on May 3, former PwC chief executive Tom Seymour told partners that six to eight partners shared the leaked information, while another 30 to 40 partners, which included himself and other senior leaders, received the emails without being aware that they contained leaked information.
Mr Calleja stood down from his position at PwC on May 10. A PwC source said Mr Calleja felt it was appropriate to step down from his role ahead of the firm’s internal inquiry.
In 2017 Mr Calleja had been a member of a large group of advisers to the Black Market Task Force (BMTF) which recommended that bidders for large Commonwealth should face a certification process to show they had a good tax compliance record.
Treasury told of confidentiality breach
Treasury has told the Senate that in September 2018 it was asked to provide information to the ATO about a possible breach of confidentiality relating to the 2016 multinational anti avoidance law.
Mr Calleja’s appointment to the Black Economy Advisory Board in 2019 gave him regular access to Mr Hirschhorn and Ms Mrakovic, albeit in a different context to the tax avoidance laws scandal.
Mr Calleja did not respond to questions from The Australian Financial Review.
The proposal that companies and advisers involved in hyper aggressive tax schemes should be barred from government contracts was referred to the ATO which conducted discussions with big four firms over three years.
The former Inspector General of Tax, Ali Noroozi, who is now a PwC partner, has substituted for Mr Calleja at some Black Economy Advisory Board meetings.
Mr Noroozi is believed to have had a key role in securing agreement from the ATO to drop scrutiny of tax records or a certification scheme in favour of a voluntary self-regulation agreement adopted by the big four firms. He did not respond to queries from the Financial Review.
Last August Mr Hirschhorn unveiled these Large Market Tax Adviser Principles, which the ATO has said is the first of its kind in the world, and would “provide their clients, the community, government and the ATO with confidence that they are not supporting tax avoidance”.
No further moves have been made to regulate aggressive tax advisers.
