Senate demands PwC publish names in tax leaks scandal

Joseph Brookes
Senior Reporter

A Senate Committee has demanded that global consulting firm PwC publicly reveal the names of staff involved in the tax leaks scandal, which the Treasurer  has called a “trashing” of the consultation process.

Jim Chalmers on Thursday stopped short of endorsing the Committee’s recommendation that PwC name staff involved because there is an ongoing criminal investigation, but did call for more transparency.

“Of course, we want to get to the bottom of what’s happened here and people should be accountable for their actions,” the Treasurer said.

The so called ‘tax leaks’ scandal dates back to 2013 but only came to light in January, when the Tax Practitioners Board revealed it had deregistered PwC Australia’s former head of international tax, Peter Collins.

Mr Collins shared confidential information obtained through consultations with government about a tax avoidance law with fellow partners and staff, despite signing several confidentiality agreements.

The information he leaked was then used by PwC staff to develop and market a workaround — codenamed the ‘North American project’ — which was then marketed to its biggest clients and prospective clients, including US tech giants.

On Wednesday the Senate Finance and Public Administration References Committee released a report on the scandal, unusually, while its inquiry is ongoing.

It accuses the firm of engaging in “a deliberate strategy over many years to cover up the breach of confidentiality and the plan by PwC personnel to monetise it”.

“It stretches credulity that the senior leadership of PwC were ignorant of all this,” the report said.

The committee said PwC had been “stonewalling” earlier investigations into the scandal by the Tax Office with the inappropriate and incorrect application of legal professional privilege to tens of thousands of PwC documents and ignoring legal obligations to report the breach of confidentiality.

PwC has already provided the committee with a list of 63 PwC partners and staff believed to have at least received the confidential information. But the extent of individual’s involvement was not explained and PwC has asked for the list not to be published.

The committee is reluctant to publish the list due to the ongoing investigations into the scandal by the Australian Federal Police and the Tax Practitioners Board.

Its report recommends PwC release the list itself and calls for the firm to “co-operate fully and openly with all investigations and inquiries”.

Committee chair Richard Colbeck on Wednesday evening told the Senate it is clear the information was shared internationally and that other jurisdictions should be investigating as well. But the firm still had not grasped its responsibilities, according to the Tasmanian Senator.

“This is not just a calculated breach of trust, but it’s an egregious one, very much so. It’s a breach of trust in so many different ways.

“PwC doesn’t seem to understand that it’s their responsibility to deal with this – to provide appropriate information to the Australian community and the Australian authorities,” Mr Colbeck said.

“They’ve handed over to us a list of 63 names and then said to us, ‘don’t publish it,’ but we don’t have the background information to know the depth of involvement or otherwise of any of those people. The fact that they can’t seem to even get that right or understand what their responsibilities are as a part of this process actually compounds the problem.”

Labor senator Deborah O’Neil compared the inquiry’s efforts to uncover information to “the extraction of teeth” and said the current PwC boss, Kristin Stubbins, “doesn’t seem to understand the nature of transparency and accountability”.

“What is manifestly clear is that the company failed in its duty of care towards its own partners and personnel and to Australian taxpayers, and it failed to report the actions of unfit and improper persons in their midst,” Ms O’Neil said.

“This is a failure that extends because of the structure of PwC, thereby to all partners.”

Senator Barbara Pocock, who has also pursued the matter on behalf of the Greens, called for a two-year removal of PwC’s registration as a tax practitioner, a ban on government contracts, and a referral to the National Anti-Corruption Commission (NACC) when it launches next month.

“This appalling, unlawful chapter must have consequences… We will be looking beyond the tip of the iceberg. Our country deserves better,” she said.

The Albanese government has implemented procurement reforms targeted at PwC but has all but ruled out a government wide ban on the firm.

The Treasurer on Thursday said it “remains to be seen” if the matter should be one of the NACC’s first inquiries.

As an independent body, the NACC can undertake inquiries on its own initiative.

Do you know more? Contact James Riley via Email.

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