Greens call for consulting reforms; PwC tax scandal investigation ongoing, Scyne Advisory cleared

PwC Australia is still under investigation over its role in a tax scandal, as the Department of Finance mulls reforms to manage contracts and consultants working with government.

Greens Senator Barbara Pocock said the hearings showed the need for further reforms in the public sector’s engagement with consultants. Picture: NCA NewsWire / Martin Ollman

PwC Australia is still under review by the Department of Finance over its role in a tax scandal, as the department mulls further reforms to manage contracts and consultants working with government.

Speaking at a parliamentary hearing on Monday, the department’s commercial group procurement division first secretary Andrew Danks said the government was still reviewing PwC’s arrangements with the federal public service after the discovery of the firm’s misuse of confidential information last year.

This is despite PwC selling much of its government consulting business for $1 to private equity player Allegro Funds.

Mr Danks said PwC still had some contracts with the government and Finance would review its engagement with the public service and its handling of confidentiality issues.

He said Finance’s review of Scyne Advisory, the former government consulting arm of PwC, had found the firm was “an appropriate company to deal with”.

“There are not a lot of contracts PwC has with the Commonwealth anymore,” he said. “We still think it’s important we finish that review to provide agencies some comfort around the ethical soundness.”

This comes after PwC was revealed to have misused confidential government tax briefing documents to create new tax strategies for clients.

Mr Danks said Finance was also finalising new rules that would require firms dealing with the public service to notify the government if there was a similar breach to the PwC tax scandal.

Finance also told the inquiry it was well progressed on a review into confidentiality agreements with consultants. The department’s commercial group deputy secretary Richard Windeye said the review would consider the circumstances in which conflicts can arrive and will form a part of a package of responses from the government.

He said 52 submissions had been made as part of a feedback round with firms, with plans to make the code available from July. The code would require firms to avoid conflicts and if one is identified, to disclose it and have a strategy for managing it.

Mr Windeye said the government was also looking to create a central register to track terminations of consulting contracts to the public service, which would see firms named and shamed for material breaches.

Greens Senator Barbara Pocock said the hearings showed the need for further reforms in the public sector’s engagement with consultants.

“The last year has revealed serious weaknesses in the regulation and enforcement of external contracts with the Commonwealth government,” she said. “The regulation of consultants and the enforcement of contract terms has been shown to be seriously lacking right across government.”

Speaking later on Monday Tax Office second commissioner Jeremy Hirschhorn said of the tax scandal that he regretted not pushing the firm harder on the issue in 2019. As revealed in The Australian, Mr Hirschhorn and the former CEO of PwC Australia Luke Sayers repeatedly met, as the ATO ramped up its investigations into PwC’s misuse of confidential information.

Mr Hirschhorn told Mr Sayers about a range of concerns with PwC’s tax group behaviours, including warning the PwC boss to review a tranche of emails that allegedly showed collusion between partners at the firm to share confidential information.

Mr Hirschhorn said if given the opportunity again he would have sought to raise his concerns with PwC’s board. He said he hoped the PwC governance board “would have taken things seriously”, rather than the response the issue received which saw it characterised as confined to the firm’s tax practice.