PwC tax scandal stink shows consulting sector problems

Much of the stench has continued to waft from PwC, where the Collins fallout has enveloped his former partners, significantly damaging its brand, both symbolically and materially.

You know that experience of walking past the bins, post-Christmas Day, and passing the one that absolutely stinks.

The aftermath of someone’s seafood feast, left for the neighbourhood’s displeasure, by someone who wasn’t responsible or thoughtful enough to freeze the prawn heads until bin day to save the stink.

Maybe they just don’t care? Putting themselves in a class of people who do what they want and walk away from the consequences. And that annoys the hell out of any decent Aussie.

There are similarities for Australians who might be casually walking past the headquarters of the big four auditing companies.

The red bins probably aren’t out on the street at Barangaroo, and you know there have to be some good people in there, but you’re pretty sure there’s more than a few of the type that are so removed from the lives of ordinary hardworking suburban Australians that after the feast they just leave the metaphorical prawn heads rotting for others to cop.

At least that was the case until the public became aware of the actions of PwC’s Peter John Collins. 

The now former partner ripped off his fellow Australians by using confidential information from his own government to put together a product for multinationals so they could avoid paying their fair share of tax. Australians had a sniff, of course, that the big consulting firms weren’t always acting in our interests – $1m for a non-report into RoboDebt, anyone?

Former PwC employee Peter Collins at his home in Sandringham in August 2023. Picture: Luis Enrique Ascui

But after the Senate got hold of 144 pages of internal PwC emails on May 2, 2023, Australians’ doubts were confirmed.

Much of the stench has continued to waft from PwC, where the Collins fallout has enveloped his former partners, significantly damaging its brand, both symbolically and materially.

And for the sector, the revelations of the scale of conflict-of-interest concerns, the abuse of the public purse, the cheating scandals, the determination of professional associates and supposed gatekeeper associations to look away, to deny and to cover up the cultural and professional failures of the “rainmakers”, have been an important contribution to public awareness.

For some, it is shocking. For others, it is confirmation of suspicions held, and for others it is an outrage – that the rivers of public dollars flowing into these partnerships have been interrupted by annoying parliamentarians.

There is a mighty battle yet to be won to ensure that the public good triumphs. The fact is, these audit and assurance and tax and consultancy partnership franchises are multinational, long-lived and enduring.

Their CEOs will serve terms much longer than many prime ministers and presidents around the world. They have insidious, spiderweb-like global networks that are more established and long-lived than many multilateral public institutions.

Add to that the wealth and job security they have, the access to power and capital, the incentive to be the servants of every multinational company that doesn’t want to pay taxes in any jurisdiction, and you have a culture of self-interest in ascendancy over the old-fashioned notions of professional service to the common good.

PwC CEO Kevin Burrowes appearing before the parliamentary joint committee following the company’s tax leaks scandal. Picture: Screengrab

And let’s not forget the PR and communication skills to assist in all that dissembling.

Democracy, in contrast, is fragile. It is subject to constant change, as elections bring new governments with new agendas.

The enthusiasm of one administration in holding the big four to account may wax and wane depending on the motivations and personnel of its successors.

Even the more enduring institutions such as the OECD struggle to counterbalance the worldwide practice of base erosion profit shifting that has contributed to such uneven payment of taxes in jurisdictions where profits are actually made.

Among the people inside PwC, Deloitte, KPMG and EY there are consummate professionals; good people who have shared with me their despair at what has been going on in their industry.

Many are ashamed of their leaders and of the sullying of their own deep professional commitment to use their talent, knowledge, skills and will to deliver services in audit, tax and assurance in ways that serve the national good.

Senator Deborah O'Neill

They are hungry for the cultural, regulatory and legislative change necessary to restore integrity to the sector.

But they know all too well that the challenge is huge, and they know that what were once quietly held concerns among ordinary Australians have been awakened. How awakened? Let me finish with this.

A couple of weeks ago I was walking through my local shopping centre on a Saturday afternoon.

A man in his early 40s, walking towards me in his boardies, singlet and thongs, gave me “that look”. The one where I know I have been recognised.

In the coming moments anything is possible.

“Are you Deborah?” he asked.

“I am,” I replied, waiting for what might be coming next.

“Good on ya, love,” he said. “Thanks for getting those …”

He struggled for the word.

I waited.

“Those – those thieves,” he said.

I was initially surprised by his word choice but something sounded right about it.

No amount of justification of using your smarts to rip off your fellow citizens can ever be justified.

A white-collar thief is just as much a thief as any other. And the stench? Well, it lingers.

Senator Deborah O’Neill is the Labor chair of the Parliamentary Joint Committee on Corporations and Financial Services.