Wednesday, March 06, 2024

Deborah O'Neill - It’s time to clean up the consulting sector once and for all

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 It’s time to clean up the consulting sector once and for all

We cannot allow the pendulum to swing back to the unacceptable status quo where greed, deceit and conflict of interests are allowed to thrive.

Deborah O'Neill

It is now more than a year since parliament, and the public, first heard the shocking allegations of misuse of confidential government information at PwC.
In a Senate Estimates hearing late in the evening of February 15, 2023, Australia was shocked to hear about Peter Collins of PwC, and the international scheme of tax avoidance planned by one of our country’s most visible companies.
In the wake of this revelation, there has been a torrent of criticism against our largest consulting, audit and accounting firms: KPMG, EY, PwC, Deloitte, McKinsey, BCG and Accenture. Almost every one of these franchises and conglomerates has faced a public lashing at the hands of the media or parliamentary inquiries. But this is not the first time that major consulting firms have faced intense criticism.
Kristin Stubbins, former PwC Australia acting CEO, is appearing today at the Parliamentary Joint Committee on Corporations and Financial Services. David Rowe
The consulting pendulum is a concept that suggests that at some points public favour is inclined towards consultants, and at other times they may face intense public scrutiny and critique. The sector’s ongoing survival and largely unchanged methods of operation are supposedly assured by the pendulum’s eventual swing.

It is time to end this back-and-forth, and to still the pendulum at an appropriate point, where the valid contributions of these firms can be recognised and valued, but those contributions are made within a framework of assurance on ethical standards and professional conduct that is in the national interest.
Since PwC’s gross misconduct became public, the sector-wide airing of grievances has been necessary and the exposure of wrongdoings by every major firm has been deeply confronting. However, real change demands more than public shaming.
The Albanese government has been prompt and firm in its response to this scandal. There have already been fundamental changes to both government procurement practices and the penalties applicable to those engaging in wrongdoing. The Senate’s finance and public administration committee will soon table its final report, which will speak to the government’s use of consulting services and the procurement practices and ethical considerations that govern this area of public expenditure.
This is a historic moment that demands immense scrutiny for the audit, accounting and consulting sector.
Beyond these issues remains a vast ecosystem of regulatory capture, ethical malaise and administrative dysfunction within the audit, consulting and accounting sectors. It is the prerogative of both the public and private sectors to ensure that the work of reform does not stop here, and that the thoughtful deliberate work of sector-wide rehabilitation is assured.
So far, the problems have been revealed and the territory laid out. Now the task is to get into the detailed, careful work of deep consideration and a robust and sustainable reform package of policy ideas and recommendations.
The Parliamentary Joint Committee on Corporations and Financial Services that I chair will spend the next months consulting with industry stakeholders and key firms with a view to genuine, long-lasting reform of this troubled sector.
It is an undertaking necessitated by the severity and complexity of the transgressions to which we have all been witness. This body of work is a moral, economic and political imperative for the benefit of the financial markets and all those Australians whose superannuation investments are reliant upon the ethical action of auditors.
This is a historic moment that demands immense scrutiny for the audit, accounting and consulting sector. We cannot allow the pendulum to swing back to the opaque and unacceptable status quo where cultures of greed, deceit and conflict of interest mismanagement are allowed to thrive. We cannot allow the degradation of basic ethical and governance principles, the minimisation of staff welfare, and the gross abandonment of professionalism to ever occur at this level again.
The firms in question are deeply enmeshed within our financial sector, government departments and the superannuation industry. These firms play a crucial and irreplaceable role within Australian society, but we must fundamentally change how they engage in our public life and in our economy. There must be an ongoing determination within all public and private spaces of our nation to clearly commit to procedures, practices, beliefs and ethical standards that reveal and accept the primacy of the public good above all other considerations.
To guard against the kind of misconduct that has occurred from ever happening again, government, industry and the firms themselves need to participate in the process of change, and fully commit to it. It is a significant task, but it is one worth undertaking.
I hope that all those called to participate in this next phase of parliamentary work see that their insights, their truthfulness, and their knowledge can enhance outcomes for all Australians. This vision for a better reality for our nation must triumph, and I will give the endeavour my all.

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Deborah O'Neill is a senator for New South Wales.

  1. God gave us the gift of life; it is up to us to give ourselves the gift of living well.
    ~ Voltaire

The human race has one really effective weapon, and that is laughter.
~ Mark Twain