Government rejects major reforms and gives ‘big four’ firms a reprieve
The Albanese government has given consultants a ‘massive reprieve’ by rejecting most Senate recommendations to overhaul consulting contracts after the PwC tax leaks scandal.
The Australian government has handed the big four consulting firms a massive reprieve in its official response to the Senate inquiry into the PwC tax leaksscandal.
The Albanese government released its response on the Friday afternoon before the Australia Day long weekend, and has chosen bureaucratic tinkering over the structural demolition many demanded, according to former KPMG partner turned whistleblower Brendan Lyon.
Of the 12 recommendations from the Finance and Public Administration References Committee, the government has only fully agreed to three, preferring to agree “in principle” or “in part” to four. It disagreed or simply “noted” the remaining four. And merely “noted” the aggressive overhaul proposed by the Greens.
When the PwC tax leaks scandal first broke three years ago, it shocked the public and shone the spotlight on billions of taxpayer dollars the government was spending on consultants; particularly the so-called big four of PwC, KPMG, EY and Deloitte.
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Government rejects bid to allow politicians to kill consulting deals
Edmund Tadros Feb 2, 2026
Labor has rejected a bipartisan proposal that would have allowed a parliamentary committee to cancel large consultancy contracts, saying the sweeping changes it has already made in the way that the public sector can engage professional services firms are working.
In a belated response to a Senate inquiry, which published its report 19 months ago, the Albanese government separately noted without comment dozens of recommendations made by the Greens, including that PwC and any firm run by its former chief executive, Luke Sayers, be banned from being awarded any contracts from the federal public service for five years.
Senator Deborah O’Neill questions former PwC chief executive Luke Sayers at a committee hearing in 2023. Alex Ellinghausen
The Senate inquiry was established in 2023, after the disclosure that a PwC partner had used confidential government tax proposals to further the interests of the firm and its clients. The committee was chaired by Liberal senator Richard Colbeck, but the questioning of firm executives was led by Labor senator Deborah O’Neill and Greens senator Barbara Pocock.
The inquiry was one of a number of investigations into a scandal that led to PwC selling its public sector consulting division for $1, the government reducing its use of the big four consultancies, an unprecedented crackdown on tax advisers, and reforms to government procurement.
The government response to the 12 bipartisan recommendations noted changes had already been made to increase contract transparency, to tighten the way consulting services are bought, and to oblige consultants to train public servants during projects they are working on. Almost 12,000 public servants received procurement training in the past four years.
Review committee would ‘create legal risk’
The government rejected a recommendation to create a parliamentary review committee for large consulting contracts because it would “create legal risk” by politicising purchasing decisions.
Colbeck, who has introduced a private member’s bill to establish such a committee, rejected the government’s description of its role.
“The purpose of the committee would be to provide parliamentary scrutiny of public spending on consulting firms and ensure value for money,” he said.
The government, in its response, said recommendations to review partnership laws governing the big consulting firms – Deloitte, EY, KPMG and PwC – and force professional bodies to report to parliament would be considered by a still-unpublished Treasury review of the sector.
The Treasury consultation, which closed to submissions in June 2024, is examining reform of the fragmented and light-touch regulation of accounting partnerships in Australia, whose auditing, tax advisory and insolvency services are of systemic importance to the economy.
The government response said PwC was responsible for a recommendation that the firm “promptly publish accurate and detailed information about the involvement of PwC partners and personnel” involved in the leaks.
Senator Pocock said it was “unsurprising but extremely disappointing that the government was offering only very small tweaks to procurement but won’t touch essential bold structural reform with a 12-foot pole”.
O’Neill welcomed the response but urged her “colleagues in government to remain extremely vigilant about the operations of these consulting firms and their relationship with government”.
Comment was sought from PwC and Sayers.
Final recommendations and government response
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Edmund Tadros leads our coverage of the professional services sector. He is based in our Sydney newsroom. Email Edmund at edmundtadros@afr.com.au
