Senate probes conflicts of interest and integrity issues at consultants

Brandon How

The Senate will investigate conflicts of interest, integrity issues and other unethical behaviour at management consultants working for government, after the Greens successfully pushed for an inquiry.

The Finance and Public Administration References Committee will consider the “management and assurance of integrity by consulting services provided for the Australian Government” in an inquiry which runs until September.

Under terms of reference published on Thursday, the inquiry will look at “measures to prevent conflicts of interest, breach of contract or any other unethical behavior by consultants” as well as enforcement measures that can be taken against “integrity breaches, such as the inadequate management of conflicts of interest, breach of contract or any other unethical behaviour by consultants”.

The bland language belies the anger felt by some parliamentarians about certain behaviour of management consultants, most notably the scandalous behaviour of PwC in relation to dealings with confidential tax information.

The Senate inquiry will also consider how to manage risks to public sector integrity from engaging consultants, as well as issues of transparency of consultants’ work and their accountability for it.

The terms of reference are almost entirely in line with those canvassed by the Greens at the end of February. A report is expected to be tabled by September 26.

Greens Finance spokesperson Senator Barbara Pocock.

Greens Finance spokesperson and Senator Barbara Pocock initially called for a review of government use of private accounting firms and the Big Four consulting firms at the end of January in response to a shocking scandal involving PwC. Senator Pocock is a member of the Finance and Public Administration References Committee.

The revelation that the Tax Practitioners Board (TPB) had deregistered PwC partner and former head of international taxation Peter Collins for leaking information from confidential government briefings on tax law reform with other PwC partners, staff, and clients sparked outrage in the Parliament.

The multinational was also sanctioned for failing to manage conflicts of interests of its partners and staff. A Senate estimates hearing was later told in mid-February that up to 30 PwC partners and staff were involved, although PwC chief executive Tom Seymour has denied this.

At the time, Treasurer Jim Chalmers said he was “absolutely furious, absolutely ropeable about these revelations”. He also sought advice from Treasury, the chair of the board of tax, and the head of the Australian Taxation Office if additional steps should be taken to “protect the integrity of these important processes”.

“There is no consultation without trust, and we want to be able to consult in a meaningful way when changes to the tax system are in prospect, and the actions that we’ve seen alleged and reported cut across that,” the Treasurer said in January.

“This is a shocking breach of trust, an appalling breach of trust and as a government that wants to be consultative where we can, this puts that sort of consultation at risk and so it puts the quality of economic decision making and policymaking at risk as well.”

Senator Pocock, who referred the matter to the senate on Thursday, was aghast by the behaviour of Mr Collins. In January, she questioned “What confidence can tax-payers have that conflicts of interest like these are not widespread?”.

“These companies, PwC, Deloitte, EY and KPMG, are raking in hundreds of millions of dollars each year doing work that should be done by the public sector, and without appropriate assurances about ethical behaviour,” she said.

“The influence of the Big Four goes beyond donations and contracts. They rip the heart out of the public service by poaching good people and are contracted often for hugely inflated fees to undertake policy analysis and run programs that could and should be done much more efficiently by a robust public sector – behaving ethically and without conflicts of interest.”

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