Australian Government paves way to resume PwC contracts

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EXCLUSIVE

ANTHONY KLAN

The Federal Government has paved the way to resume giving contracts to disgraced consultancy PwC Australia — and as soon as December — despite the much heralded “divestment” of its “government business” to Allegro Funds last year.

The Department of Finance has signed a “mutual agreement” with PwC that the consultancy giant won’t bid for any new Commonwealth work “until at least until 1 December 2024”.

The remarkable revelations, contained in a “procurement policy note” to Commonwealth departments and agencies, are despite Finance issuing PwC an open-ended “effective ban” in May last year amid the tax leaks scandal, which remains ongoing.

In response to the ban, and widespread public outrage, PwC “divested its government business” of 1,400 PwC partners and staff, selling it for the nominal sum of $1 to private equity group Allegro, which rebranded the business Scyne Advisory.

It was widely considered that PwC would no longer be given any Federal Government contracts. Yet the Department of Finance, responsible for overseeing all Commonwealth procurement, has now indicated that not only is that not the case, but that PwC could again be receiving taxpayer funds before Christmas.

The procurement note is dated this Tuesday — the same day the Federal Lobbyists’ Register was updated to show PwC had engaged a lobbying firm run by two former senior ALP staffers.

“PwC has engaged a lobbying firm run by two former senior ALP staffers”

Brookline Consulting is run by Lidija Ivanovski, former chief-of-staff to Labor deputy leader, and now also Deputy Prime Minister, Richard Marles; and Gerard Richardson, who until March last year was communications director to Federal Treasurer Jim Chalmers.

The surprise April 30 procurement note says Finance is undertaking an “examination” as to “PwC Australia’s ethical soundness” and will provide an “update” on December 1.

The “examination of PwC’s ethical soundness” was “ongoing” and Finance had “taken responsibility for managing the Commonwealth’s response” to the “ethical issues arising” from the PwC tax leaks scandal.

Finance’s actions would form a “whole of government view” on “PwC Australia’s ethical soundness”.

Finance had signed a “mutual agreement” with PwC Australia that “PwC Australia will not bid for any new Commonwealth work at least until 1 December 2024”.

“PwC Australia has agreed with the Commonwealth that it will temporarily cease new contract engagements with Australian Government entities captured by the Commonwealth Procurement Rules until 1 December 2024”.

Finance, run by Secretary Jenny Wilkinson, makes no mention of why any “agreement” with PwC was required.

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Department of Finance Secretary Jenny Wilkinson. Source: ABC News/Nick Haggarty

It is the first time Finance has mentioned PwC by name — its “procurement policy note” of May 19 last year, reported as an “effective ban” on PwC, did not specifically name it.

That note warned agencies and departments that in issuing contracts they must (Finance’s emphasis) “consider any unethical behaviour” including failure to abide by “confidentiality provisions”.

In January last year it was revealed PwC Australia obtained confidential Australian Government tax policy data — gleaned while providing advice on preventing multinationals avoiding Australian tax — and sold it for millions to multinationals seeking to avoid Australian tax.

A string of investigations into the tax scandal have been launched by authorities, both in Australia and overseas, but none have been completed.

On March 28 the senate inquiry into consultancies issued a highly damning interim report, titled “PwC: The Cover-up Worsens the Crime”.

Comprised of members of all major Australian political parties, the Senate inquiry found vast and ongoing problems at PwC, including a “failure to genuinely change” and continuing a “cover-up” of the major scandal.

“PwC have still made no genuine effort to fully investigate and address the issues,” it reported just five weeks ago.

“The committee does not see how PwC can recover their reputation while it continues to cover up.

“Indeed, the cover-up worsens the crime”.

“The committee does not see how PwC can recover their reputation while it continues to cover up” – Senate inquiry

As previously revealed, Federal agencies have continued to give contracts to PwC’s “Indigenous” arm, “PwC’s Indigenous Consulting”.

Finance said its April 30 note “does not apply” (emphasis Finance’s) to contracts with PwC’s Indigenous Consulting.

“Finance has separately concluded a review into PwC Indigenous and found that it was appropriate for the Commonwealth to continue engaging with PwC Indigenous”.

Finance provides no information as to how it came to that conclusion.

PwC Australia owns 49% of PwC’s Indigenous Consulting, with, as previously revealed, the remainder owned by just two people, both Indigenous.

The structure means PwC’s Indigenous Consulting can be awarded “limited tender” Federal grants intended for small Indigenous enterprises.

PwC’s Indigenous Consulting is based inside PwC’s Sydney headquarters, it shares a website with PwC and its directors include PwC partners.