Health sector under scrutiny as NSW flags inquiry into consultants after PwC tax scandal

The NSW government will scrutinise the $1bn use of consultants in the state’s public service and Health will be the first department to be reviewed.

NSW Greens MP Abigail Boyd will chair an inquiry looking at the use of consultants. Picture: Christian Gilles

The NSW parliament’s upper house will investigate the use of consultants as federal and now state governments try to uncover how extensive the links are between their agencies and PwC Australia.

Health will be the first department to be reviewed by the NSW government as it assesses the use of PwC and other consultants.

PwC acting chief executive Kristin Stubbins may now face questions as she sat on a NSW district health board during the time her firm was awarded millions of dollars in contracts to that district.

NSW Health has refused to comment on the value of contracts awarded to PwC to consult on South Eastern Sydney Local Health District during the time Ms Stubbins was a member of the board.

“During her time on the SESLHD board Ms Stubbins recused herself during matters

where there may have been a perceived conflict of interest,” a spokeswoman wrote.

Ms Stubbins was a member of the board from 2012 to 2016 and was the chair of the finance and performance committee during the time its financial recovery plan was prepared.

Minutes show she attended at least one meeting when the financial recovery plan was discussed but recused herself from others.

The state government spent more than $1bn on consultants over five years to 2022, according to the Audit Office of NSW in a report that found multiple accounts of noncompliance with procurement rules including breaching thresholds.

SESLHD board chairman Michael Still said that times had changed in terms of conflicts of interest, but in those days the board “needed help from whatever competent professional they could get”.

“There is no hiding the fact that they (PwC) did quite a lot of work because quite a lot of work was needed,” Mr Still said.

PwC has refused to answer questions about the work it did for the SESLHD and issued a legal warning about what further investigations may have occurred around the matter.

The Australian in no way suggests that PwC or the SESLH Board acted improperly.

PwC has been referred to the Australian Federal Police after it was found to have used confidential information given to it by the federal government to help it develop international tax avoidance laws; and then used that very same confidential information to help global clients avoid tax.

PwC’s Melbourne corporate office lobby in Southbank. Picture: Andrew Henshaw

In Senate Estimates on Wednesday it was revealed that despite being asked by the Tax Practitioners Board to reveal the names of nine partners PwC stood down on Monday, it has yet to be given those names.

There are 53 partners and staff – whose names have been redacted – who were included on emails that now deregistered PwC partner Peter Collins shared about tax minimisation based on confidential government information.

It is not suggested any of those copied into the emails had knowledge of, or were involved in, the tax scandal.

The NSW Legislative Council inquiry into the management of consulting services will look at the transparency of work undertaken by consultants and their accountability for this work.

Greens MLC Abigail Boyd, who will chair the inquiry, said she wanted to consider “confidentiality concerns which go to fundamental breach of trust with these consultants”.

At least two days of hearings in the second half of June will focus on health.

“We’re particularly concerned about the appointment of consultants to agency boards and the two-way flow of information between the boards on which they sit and the companies they represent, and the consultant firms they represent,” Ms Boyd said.

“It’s a “fundamental breach of trust with these consultants so it’s not just conflict of interest it’s revolving doors and gutting of the public sector as a result.”

In a recent note to partners KPMG chief executive Andrew Yates and Australian chair Alison Kitchen issued a mea culpa for the firm’s work on NSW Treasury and Transport projects on different aspects of the Transport Asset Holding Entity.

“As a firm we have not got everything right. And with 10,000 people working on complex and high-profile projects, there may be cases where we fall short of what is expected,” they wrote.

The NSW parliamentary inquiry will examine the reporting on and disclosure requirements on the use of consultants and whether they are being “used strategically and in a way that delivers value for money”.

The management of and prevention of breaches of conflicts of interest, or breaches of contract or any other unethical behaviour will be put under the microscope in the inquiry which is due to report in May next year.

Former secretary of the NSW department of Premier and Cabinet Tim Reardon, who quit the government in February last year, was announced as PwC’s new national transport and precincts leader just days later.

Mr Reardon, now managing director at PwC, had formerly served as secretary of transport for NSW.

Ms Boyd said the inquiry would look at “confidentiality concerns which go to a fundamental breach of trust with these consultants.

A recent NSW upper house inquiry into disputes over sight lines in Barangaroo, on Sydney Harbour, highlighted concerns over the use of consultants.

The inquiry heard senior public servant Tim Robertson went on to consult for Aqualand over Central Barangaroo after dealing with the developer in his role with Infrastructure NSW.

Originally published as Health sector under scrutiny as NSW flags inquiry into consultants after PwC tax scandal