Legal constraints are handicapping the government from getting out of PwC contracts after a now-former partner was caught sharing confidential tax policy information to drum up business.
Home Affairs Minister Clare O’Neil said the actions of the consultancy firm were “a grotesque betrayal of trust” and was working to ensure its held to account.
But the minister said there were potential legal repercussions for dropping PwC from government contracts.
“We face legal constraints around existing contracts,” she told ABC radio on Thursday.
“We can’t break the law just because we’re the government.
“But we are doing everything we can to make sure there is accountability here.”
The partner shared Treasury information on measures to bolster tax laws, including rules stopping multinationals from lowering their tax bill by shifting profits from Australia to other jurisdictions.
The NSW Finance Minister Courtney Houssos said she was considering a new plan that would slap multi-million dollar penalties on businesses caught disclosing confidential government information.
Ms Houssos said tax consultancy allowed for the private sector to give input into the tax regime and that leaked information could help businesses and individuals avoid tax.
“The NSW government will not hesitate to come down hard on anyone who breaks trust with or takes unfair advantage of the people of NSW,” she said.
Treasury referred the matter on Wednesday night to the Australian Federal Police, who will consider if criminal charges should be laid.
They noted the “seriousness of the misconduct” in announcing their decision to involve the police.
PwC’s CEO has also stepped down and the firm has announced an investigation into its governance, culture and accountability led by former Telstra boss Ziggy Switkowski, who sits on a number of corporate boards.
Finance department officials are set to be grilled on how the government plans to respond to the scandal.
The government has taken steps to strengthen the Tax Practitioners Board to stamp out unethical behaviour and flagged further action, but has yet to detail what that will look like.
Finance Minister Katy Gallagher, who will appear at a Senate estimates hearing alongside officials in Canberra on Thursday, has described the behaviour at PwC as “outrageous”.
She says it seriously challenged the trust between government and such private sector firms, and the government would be seeking to reduce its reliance on consultants.
The Greens want the government to ban such contracts.
Centre for Public Integrity research shows the volume of contracts with the “big four” consultancies – PwC, KPMG, EY and Deloitte – has surged 400 per cent in the past decade.
In 2021/22, the public service contracted $1.4 billion with the four firms.
On Wednesday, senators heard the attorney-general’s department was “having another look” at a contract with PwC for managing workflow.
Australian Associated Press