Defence spends $223m with PwC as nine partners stood down for tax scandal

As nine senior staff at PwC are ordered to take leave, an eye-watering spend with the consulting firm has been revealed.

The Defence Department has revealed it has 54 contracts worth more than $223m with embattled consultancy firm PricewaterhouseCoopers.

The firm, which has ordered nine senior partners on leave and is subject to an Australian Federal Police investigation, has become embroiled after a former senior tax consultant leaked confidential information obtained as part of his government contract to clients and partners.

In an open letter on Monday, the agency’s acting chief executive apologised on the company’s behalf for the leak.

The nine partners ordered on leave include members of PwC’s executive and governance boards.

Last week, Treasury referred former PwC executive Peter Collins to the AFP, with an investigation since launched into the allegations he shared confidential government information about changes to tax laws with partners, clients and staff that would be affected by them.

AFP says it may widen its investigation if it suspects other partners or staff are implicated.

Nine senior PwC partners have been ordered to take leave as investigations continue into a tax scandal. Picture: NCA NewsWire / Andrew Henshaw

PwC, like other consultancy firms Deloitte, Ernst & Young and KPMG, are routinely employed by the government for contracts, but the scandal has raised questions about the future of such agreements.

The revelation about how much money Defence is spending with just PwC came as department officials came before senate estimates.

Associate secretary Matt Yannopoulos said none of the nine partners stood down had done any work relating to Defence.

“We have identified all of the active contracts with PwC and attained assurance from them most recently again yesterday to the secretary from the CEO, and to myself from the Defence lead partner, that over the last 10 years of work the PricewaterhouseCoopers has done for Defence, none of the individuals named have ever done any work for Defence,” Mr Yannopoulos said.

Defence secretary Greg Moriarty said the department was working through the issues in a “methodical way”.

Defence secretary Greg Moriarty and his colleagues confirmed the department had $223m worth of contracts with PwC. Picture: NCA NewsWire / Martin Ollman

Meanwhile, in the economics legislation committee, it’s been revealed that Treasury has a $985,000 contract for the consultancy firm to be the internal auditors.

The committee was told that PwC had been employed to audit the department “for some time”.

Treasury secretary Steven Kennedy said the department had “no cause for concern” with the delivery of the contract but conceded there was an issue about broader public perception of the company.

“The broader comment about the procurement of these services, and our ongoing procurement, is a matter we’ll consider carefully across the course of this contract, which is up at the end of this year,” he said.

Treasury secretary Steven Kennedy said the department’s contract with PwC would be ‘carefully’ considered. Picture: NCA NewsWire / Martin Ollman

Mr Kennedy said Treasury would “carefully” consider whether to renew the contract at the end of the year but didn’t want to risk “financial consequences” by cancelling it earlier.

None of the nine partners were involved in the contract, Treasury officials said,

“We’re going to very carefully consider our future procurement arrangements as they come up, but we’re going to act in line with the advice provided to us from the Finance Department,” Mr Kennedy said.

When pressed as to whether the government would consider scrapping its contracts with PwC, Finance Minister Katy Gallagher said while the matter at hand was “outrageous”, there was no “breach of procurement”.

“I know people would like us to go around cancelling existing contracts, that’s not available without significant financial risks,” she said.