Consultants given a month to respond to reveal how they handle conflicts of interest

The consultancy sector has just a month to respond to a Senate inquiry into how they deal with conflicts of interest.

Greens Senator Barbara Pocock pushed for an inquiry into the use of consultants. Picture: Martin Ollman

The consultancy sector has just over a month to pull together industry responses to a parliamentary inquiry that will dredge up questions over conflicts of interest.

The inquiry comes after the banning of a PwC tax partner.

The Senate moved on Thursday to commission an inquiry into the use of consultants by the federal government after Greens senator Barbara Pocock pushed for the issue to be examined in the standing committees on finance and public administration.

The inquiry, due to report by September 26, will scrutinise the management and assurance of integrity by consulting services.

Senator Pocock said she pushed for the inquiry “because we need to have confidence that they behave ethically. And pay the price when they don’t”.

“I think there should be appropriate penalties for when people betray confidences,” she said.

Ms Pocock said the committee had deliberately drawn the terms of reference to capture all forms of consultants working with the government and not just the big four.

“I’m interested in the work of consultants across the board and interested in the practices wherever they’re off the rails,” she said.

But the consultancy sector has only been given until April 21 to respond to the terms of reference.

The terms include assessing how firms manage and prevent conflicts of interest by consultants, and how breaches of contract or unethical behaviour by consultants is dealt with.

The firms will be asked to disclose the enforcement measures that they take in response to integrity breaches, such as inadequate management of conflicts of interest or breaches of contract.

The sector must reveal how it manages risks to “public sector integrity arising from the engagement of consultants” and the transparency of work undertaken by consultants and their accountability for that work.

The Tax Practitioners Board moved to ban PwC tax agent Peter-John Collins after he was found to have shared confidential tax policy information.

TPB boss Michael O’Neill said Mr John-Collins shared the confidential information obtained from Treasury tax consultations with as many as 30 colleagues.

A PwC spokesman said the company would “participate in this inquiry openly and transparently”.

“We are proud of the work we do to support the Australian government to solve some of the most complex and important challenges facing our country,” he said.

Deloitte, which operates a sprawling government and public administration business and worked on the recent design of MyGov, said it welcomed the inquiry and “the opportunity to participate and contribute to this process”.

KPMG government and healthcare national industry leader, infrastructure Paul Low said the company would “work constructively with the Senate inquiry”.

“With the pace and scale of change facing the Australian community, the public sector will need to remain at the forefront of advising government,” he said,

“At times, this will require specialist skills and capabilities from the private sector to complement the resources within the public service in delivering complex, time-challenged projects.

“We look forward to supporting the important work of the committee.”

The inquiry comes as the government prepares to crackdown on the access of consultants in government. Treasury, the Australian Taxation Office and the TPB have all announced plans to put in place controls on access and use of information by external consultants.

ATO commissioner Chris Jordan said the tax office was putting in place a register of confidential consultations, setting standards for the big consulting firms.