Battered PwC faces more bruising parliamentary hearings

Parliament’s inquiry into the use of consultants in government returns on Wednesday and disgraced PwC is expected to face a barrage of questioning.

Two bruising weeks have exposed the anger in Canberra over PwC Australia’s use of confidential information and an unwillingness from the firm to confess its sins.

What began the fortnight with the resignation of PwC’s chief executive, Tom Seymour, escalated into a full-blown police investigation and talks of a ban on future work for the professional services giant.

Already PwC has lost future work with chunks of the public service, and the crisis is set to spill over into its work in the private sector.

Australia’s biggest superannuation fund, AustralianSuper, has put a halt on PwC. AusSuper said it had frozen any new contracts with PwC and issued a warning over renewing its audit deal, noting its leadership had “expressed these concerns at the highest level to PwC last week”.

A diktat from the Department of Finance last week ordered PwC to stand aside all partners working on government contracts connected to the leaks.

Finance has also threatened PwC’s likelihood of winning future contracts, with new rules requiring departments to consider confidentiality breaches when evaluating bids.

The Reserve Bank of Australia has said it would not work with PwC again until the firm revealed the names of those involved in the scandal.

“What we want to see is anyone who knew what was going on and complicit in what was going on to be identified. So we need transparency around that,” RBA governor Philip Lowe said.

PwC is facing a public excoriation after it was revealed its former head of international tax Peter Collins shared confidential government tax briefings, about plans to bring in the Multinational Anti-Avoidance Laws, with other members of the firm.

The Australian Taxation Office this week said it was “horrified” to learn Mr Collins had breached confidentiality deeds signed with Treasury and had attempted to entice the Australian Federal Police into taking up the case.

The ATO said it found its engagement with the AFP “unfruitful”, and after tough secrecy laws prevented it from sharing further information with investigators, the tax office looked at how it might punish PwC for its role in shopping around tax-minimisation strategies.

When this also fell flat, the ATO was left with going after Mr Collins personally, referring his conduct to the Tax Practitioners Board – the regulatory body that oversees tax accountants.

The TPB banned Mr Collins from practising for two years.

PwC’s former international tax leader Peter Collins.

Mr Collins now faces an AFP investigation after Treasury moved to refer him and PwC on Monday. Meanwhile a government review continues to grind through emails and other evidence showing the firm’s deliberate use of confidential information.

Other PwC partners also face an expanded TPB probe, and the regulator has revealed it was taking a new look at documents to determine which other staff from the firm had knowledge of the leaks.

Extracts of emails labelled by the TPB show Mr Collins gleefully suggesting the MAAL consultation presented an opportunity for the PwC to “own this space” and grab business from tech companies and web retailers.

Mr Collins was banned by the TPB in late 2022, but PwC continued to present the issue as one bad apple.

Speaking earlier in the year, Mr Seymour said PwC faced a “perception issue”.

The crisis has now cost Mr Seymour, who previously headed up PwC’s tax practice, his job.

A string of emails labelled by the TPB shows the confidential information was sent to at least 53 current and former PwC staff and partners.

In a statement Mr Seymour has said he was one of the partners at the firm who received the emails “which highlighted, for example, the marketing approach and financial success of the tax advice”.

PwC could face a ban from many public and private contracts. Picture: Nikki Short

“While these emails did not contain breaches of confidentiality, they do demonstrate evidence of the cultural problem at the time,” he said.

Attempts by Mr Seymour to head off the damage from the TPB’s emails, by announcing a review, didn’t stop the firm’s board rolling him. A carefully worded statement from chair Tracey Kennair noted PwC’s board “agreed with Tom that this is in the best interests of the firm and our stakeholders”.

Mr Seymour declined to comment.

Ms Kennair has since resigned from her role, followed by risk committee head Paddy Carney who stood down as PwC placed nine partners on indefinite leave.

But parliament and the public have been baying for the names of PwC partners involved in the scheme to use the confidential briefings.

PwC is understood to have assembled an internal list, but has stonewalled attempts to force the firm to reveal the names. The TPB has confirmed it has a list of names.

But a bruising week of Senate estimates has suggested PwC’s misuse of confidential information may extend further than the one tax leak. He Department of Agriculture revealed it had rebuked the firm after it received an unsolicited approach from PwC built around confidential information.

Parliament is preparing to reconvene on Wednesday next week for the Senate’s inquiry into the use of consultants and it will almost certainly focus on PwC.