PwC wrongdoers must face full force of the law, says departing federal Assistant Treasuer
Outgoing federal Assistant Treasurer Stephen Jones has taken a swipe at PwC’s deceit in responding to its tax scandal and says there should be consequences for those responsible.
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PwC Australia lied to the government and the public, according to outgoing Assistant Treasurer Stephen Jones, who said the professional services firm’s rehabilitation is a work in progress.
As he prepares to draw a line under his parliamentary career, Mr Jones claims PwC repeatedly failed to grasp the seriousness of the tax leaks scandal. He also revealed how close the government came to not revealing the full details of the firm’s wrongdoing, after parliament in May 2023 published a trove of emails between PwC partners and staff discussing the sharing of confidential government information.
PwC’s former head of international tax, Peter Collins, was banned by the Tax Practitioners Board in late 2022 after being found to have breached multiple confidentiality deeds tied to consultation sessions with the government over new tax laws.
Mr Jones said he had not appreciated the magnitude of PwC’s breaches of government trust until the 144 pages of emails came across his department desk.
It cast into doubt the multiple denials and explanations proferred by the firm and its then-chief executive Tom Seymour.
But those records almost didn’t make it into the public domain, because regulatory agencies opposed their release.
“There was great resistance to that material being release., I spent a weekend going through that and once I saw it, there was no way these guys (PwC) were going to get any protection,” Mr Jones, who also serves as Financial Services Minister, said.
He found it curious that regulators had attempted to block the release of the email trove.
“I suspect there was quite a bit of embarrassment that this has gone on,” Mr Jones said.
These emails convinced the government it had to act to punish PwC and kick-start a process of reforming the laws governing the tax and consulting sectors. In the wake of these revelations, the government had “numerous conversations” internally about how to react to the scandal.
But Mr Jones said the government wasn’t interested in seeking any further answers from PwC, noting “there could be no explanation for that egregious behaviour”. “They almost overnight achieved persona non grata,” he said. “There was clear deceit going on.”
With an Australian Federal Police investigation into the breaches under way, Mr Jones stopped short of calling for PwC partners responsible for the leaks to face jail, but said there should be consequences: “They should face the full force of the law,” he said.
“We have not forgotten just because it was two years ago.”
Mr Jones criticised the firm’s handling of the scandal and subsequent attempts to clean up its act.
He said PwC’s governance review, spearheaded by corporate veteran Ziggy Switkowski, wasn’t close to providing proper accountability.
Mr Jones sought the release of the report into the scandal by law firm Linklaters, which examined how the confidential information was shared with global partners of PwC during the years the Australian business was headed by Luke Sayers.
As revealed in The Australian, PwC International Washington national tax services partner Matthew Chen received allegedly confidential Australian government tax information in 2014.
“Somebody has engaged in extensive and systematic misuse of privileged information for corporate gain and that was obvious,” Mr Jones said. “There was no explanation of what’s gone on here; it was blatantly obvious what they had done.”
Mr Jones said without the PwC scandal, the government may not have gone as far as it had to reform the consulting sector, and pull back its spending on hired help.
“PwC exposed an overreliance on a whole heap of areas,” he said. “We obviously clamped down on that but then there was a whole range of things that were specific to the tax profession we put in train.”
The government has kicked off reviews and made a number of recommendations, including empowering the TPB as well as the Australian Taxation Office to take action and better share information.
Penalties for tax breaches have also been increased.
PwC meanwhile has sought to draw a line under the scandal, exiting a number of partners as well as amputating its government consulting arm in a $1 deal that created Scyne Advisory.
But Mr Jones said the firm’s rehabilitation, under new leader Kevin Burrowes, was incomplete.
“They’ve got a massive corporate repair job to do. It’s not something that’s going to be done overnight,” he said.
A PwC spokeswoman said the firm had “undergone significant change” and had “apologised for past failings”. “The actions of the past do not reflect the firm we are today,” she said.
“We have more than 6000 committed, hard-working people and partners who come to work to deliver the best outcomes for our clients, communities, and each other.”
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