The Australian Treasury will examine its use of PricewaterhouseCoopers as its internal auditor given the public perception of the firm at the center of a growing tax scandal.
Appearing before a Senate committee in Canberra Tuesday, Secretary to the Treasury Steven Kennedy faced questions about the appropriateness of PwC Australia’s A$985,000 ($645,000) contract, which runs until the end of the year.
“We have had no concern across the delivery of that contract, however the point is well made and understood that of the broader public perception of the company,” Kennedy said in response to a question from Senator Nick McKim.
PwC has been under fire following revelations that a former senior partner obtained secret information on tax policy while advising the government, and then leaked it to colleagues who used it to shop tax-planning advice to global clients.
“We will very carefully consider our future procurement arrangements, but we will act in line with advice from the Finance Department,” Kennedy said. “We are carefully working through all these matters and ensuring that we don’t feel exposed from a risk point of view.”
Finance Minister Katy Gallagher said while PwC’s conduct relating to the tax scandal has been “outrageous,” it was not a breach of procurement contract.
“I know people would like us to go around canceling existing procurement contracts, but that is not available at the moment without significant financial risk,” she said.
During the hearing, Gallagher also conceded that the use of consultants is a “massive problem” across the public service.
“We are clamping down on it,” she said. “We are strengthening the arrangements about how and when you use consultants. It’s infiltrated to a level I think that is not right, not acceptable and we’re re-balancing it.”
PwC Australia said on Monday that it’s putting nine senior partners on leave, and ringfencing business conducted with the government to restore confidence in the company. It is conducting an independent review into the firm’s governance and culture, and the police last week opened an investigation into the matter.
Parliamentary scrutiny is expected to intensify later Tuesday with Australian Taxation Office officials likely to field questions during the hearing.
--With assistance from Swati Pandey, Amy Bainbridge and Karen Leigh.
(Adds comment from Finance Minister Katy Gallagher in paragraphs 8-9.)
