PwC tax leaks saga: Senate final report calls for Finance Department overhaul, Greens want five-year ban

The Federal finance department has been urged to beef up its rules and guidelines about conflicts of interest and training to ensure staff can ensure taxpayers get value for money in the wake of revelations about consulting firm PwC’s tax leaks scandal.

Senators investigating the saga — in which a partner consulting with Federal Treasury shared confidential information about new tax laws with other staff at the firm to help clients avoid higher tax bills — on Wednesday released their final report, urging the Government introduce stricter rules on self-regulating professional standards organisations.

This would include organisations reporting annually on their operation of the standards to report to a joint parliamentary committee each year and to appear before the committee to ensure oversight.

The committee also wants the Federal public service to report twice-yearly on spending on consultants of more than $2 million.

Greens Senator Barbara Pocock in the same committee went a step further, recommending PwC or related entities be banned from tendering from all government work until current investigations had been resolved, and for five years given its misuse of confidential information.

“We need stronger action to put an end to conflicts of interest, to ensure value for money and to promote public sector regrowth after decades of neglect,” Senator Pocock said.

“Australians are now awake to the systemic conflicts of interest built into the consulting sector and they are expecting real solutions.”

She has also recommended a ban on political donations by consulting firms, while the committee as a whole is urging PwC to reveal the names of those involved in the breach of confidential information.

Government Senators Deborah O’Neill and Louise Pratt added the scandal sparked by PwC and the subsequent revelations about other large consulting and audit firms had “struck at the very core of Australians’ faith in the integrity of corporate Australia, and of the way in which such entities engage with government”.

Federal Government spending on consultants tripled between 2010 and 2020 to more than $1 billion and in 2021-22 the former government spent $2b on contracts with the five largest consultancy firms.

It says it has taken action to move on the issue by adding new procurement guidelines, and beefing up the public service so work did not need to be outsourced.

The report also recommends changes to the supplier code of conduct, requiring service providers act in the public interest and incorporating provisions from the public service rules and values.

In addition, the Department of Finance has been urged to review conflict of interest guidelines to provide “clear and consistent” definitions of what constituted a conflict of interest, and expectations around how they were managed — and that the department create a central register for breaches by government entities.