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Calls grow for a permanent Senate committee to monitor government use of consultants, with Coalition, Labor and the Greens showing rare signs of alignment.
Senator Deborah O’Neill says she will look closely at the proposal by the Coalition’s Richard Colbeck to boost the accountability of departments when they spend taxpayers’ money on consultants by establishing a permanent committee.
“Having worked with Senator Colbeck on this issue in the last parliament, I understand the intent and design of this legislation and the reasons why he seeks to pursue it,” O’Neill said.
“Throughout work in the Senate, and through the report of my joint committee on corporations and financial services, we have documented repeated examples where consulting firms have failed the public with their nefarious business tactics, questionable operating procedures and ‘land and expand’ profit-before-principles strategies.
“I will be pleased to keep working with Senator Colbeck and my colleagues in the Senate to ensure that these firms and the way they seek to profit from taxpayers’ money continue to receive appropriate levels of scrutiny.”
A spokesperson for O’Neill’s Labor colleague, Finance Minister Katy Gallagher, said the bill tabled by Colbeck over the past week would be subject to the usual consideration. No further comment was provided.
The Greens have voiced their support forColbeck’sproposal to establish a permanent committee to examine consulting contracts to ensure a constant eye is kept on government spending. Barbara Pocock was a member of the committee that examined the system of procurement alongside Colbeck and O’Neill.
Pocock toldThe Mandarinshe was concerned little progress had been made on the issues identified by the parliamentary committee.
This was the committee that examined issues such as how PwC Australia operated before, during, and after the tax leaks scandal, the various operational and revenue issues for other large accounting and consulting firms, the management of contractors by Finance and similar departments, and the role of professional associations in enforcing ethics among their members.
Pocock said a range of reforms are still needed to the procurement processes, and it may just require a permanent body to place pressure on government departments to make change.
“The government has not adopted many, if any, of the recommendations into the consulting services that wrapped up in the last parliament,” Pocock said.
“There has not been enough structural reform to prevent these scandals from happening again. It took an inquiry and the resources of the Senate in the context of inquiries to investigate and uncover widespread scandals in the sector.
“If Labor isn’t going to instigate structural legislative reform to regulate and break up the firms to resolve conflicts of interest rife in the sector, or strengthen procurement powers, then we do need a permanent and ongoing committee.”
A ban on PwC Australia pitching for new business expired on July 14, but the government is yet to confirm a recommendation it be allowed to compete for tenders. Now, a trio of Senators have written to the Department of Finance urging it to reconsider.
Labor Senator Deb O’Neill, Greens Senator Barbara Pocock, and Liberal Senator Richard Colbeck co-authored a letter to Finance last week, after The Australian revealed the Labor government had decided to let a ban on PwC pitching for work expire without renewing it.
This conclusion was reached despite an ongoing Australian Federal Police investigation into the firm’s misuse of confidential government tax information as well as a probe into four former members of the firm by the Tax Practitioners Board.
The PwC scandal has also been referred to the National Anti-Corruption Commission.
Finance allowed the ban on new contractual engagements with the public service to expire on July 14 after repeated extensions.
This became apparent on July 25, in a report to Finance Minister Katy Gallagher.
The office’s decision was intended to be made public that day, however Minister Gallagher ordered Finance to withhold its publication, pending further examination.
The three senators have since laid out their position which mirrors their recommendations in a parliamentary report published in June last year.
Their 2024 report, prepared by the Parliamentary Joint Committee on Corporations and Finance Services, took aim at PwC over its handling of the scandal including calling on the firm to detail which partners and staff were involved.
PwC has refused to do this.
Former PwC Australia CEO
Tom Seymour left in the wake of its tax scandal.
In addition to the recommendations in that report, Senator Pocock said PwC should be banned from working for the government for five years and not be allowed to tender for government contracts until all investigations into the tax leaks scandal were completed.
This included all new work unless PwC handed over an internal report into the affair prepared by law firm Linklaters.
“The failure of PwC International Limited to provide documentation to relevant Senate committees, whilst grave, does not impact Finance’s assessment of PwC Australia today, noting that PwC Australia is a separate legal entity within the PwC (International) network,” a copy of Finance’s report sighted by The Australian said.
The Australian Federal Police entered PwC's Sydney headquarters on Monday as part of its ongoing investigation into the firm's tax scandal. A former partner is under investigation for breaking disclosure laws by leaking confidential Treasury information to clients. A spokeswoman told Sky News the AFP were investigating individuals who had left the firm.
Circulated among Senators and government staffers, the report concludes PwC could return to contracted government work as no negative findings had been made against the firm.
Instead, Finance accepted assurances that the firm’s past actions do “not prevent this review of PwC Australia’s fitness to work with the Commonwealth in the future being concluded”.
It also heard PwC’s assurances the firm had changed its culture supported by two reviews commissioned by the firm guiding its rehabilitation.
The Australian understands Finance is now assessing the views of the Senators, with a new decision on PwC imminent.
However, sources close to the matter questioned how any decision could be rescinded given the ban had already expired on July 14.
Senator Gallagher’s office declined to comment, however a spokesman previously said consultation on a final report was “ongoing”.
Senators O’Neill, Colbeck and Senator Pocock also declined to comment.
The PwC tax scandal has cost the firm millions in lost government contracts, with the Finance report noting the firm’s public service contracts were worth $506.7m in 2023.
This was slashed to just $11.6m in the wake of the scandal, which saw PwC sell its government consulting arm to private equity player Allegro Funds in a $14m deal.
