The Australian Federal Police refused to take action against PwC over the tax advice scandal despite being repeatedly pushed by the tax office over two years, it is alleged.
In explosive revelations, Australian Taxation Office (ATO) boss Chris Jordan tonight told a senate hearing his agency had received information from “late 2017” regarding PwC that “raised a range of significant concerns” but despite pushing the AFP no action was taken.
Instead, the ATO was forced to refer the matter to agency the Tax Practioners Board – which cannot launch criminal proceedings – in mid-2020, almost three years later.
“After sharing the information with the Australian Federal Police (AFP) over the period 2018 and 2019, and providing a number of documents upon their request after our initial sample of the emails, we had to ultimately formally refer the matter to the Tax Practitioners Board in July 2020,” Commissioner Jordan said.
“After sharing the information with the Australian Federal Police over the period 2018 and 2019…we had to ultimately formally refer the matter to the Tax Practitioners Board in July 2020″ – ATO Commissioner Chris Jordan
The ATO was unable to take action itself “because unlike many other revenue authorities in other countries we do not have criminal investigative powers”.
PwC has been caught selling top-secret government data to multinationals seeking to rip-off Australians by avoiding corporate tax, with revelations this month that dozens of PwC bosses and staff worldwide were aware of the illegal activity, spanning back to 2014.
“The content received from late 2017 raised a range of significant concerns about artificial schemes being marketed by PwC, a significant concern also uncovered was the Collins matter, a potential breach of confidentiality in a Treasury consultation process,” Jordan said.
“A significant concern also uncovered was the Collins matter” – ATO Commissioner Chris Jordan
“Unlike many other revenue authorities in other countries we do not have criminal investigative powers.
“As the confidentiality breach was not a tax offence, we were unable to investigate the matter further and from 2018 we sought to refer this matter to the correct authority.
“After sharing the information with the Australian Federal Police over the period 2018 and 2019 and providing a number of documents upon their request after our initial sample of the emails we had to ultimately formally refer the matter to the tax practitioners board in July 2020,” Jordan said.
Greens Senator David Shoebridge responds to the ATO’s revelations. Source: Twitter
The matter only became public after the Tax Practitioners Board on January 23 this year released a press statement on the matter, including that Collins had been banned for two years.
Since then, Labor senator Deborah O’Neill has pushed for more details, and on May 2 the Tax Practitioners Board released a 144-page cache of internal PwC Australian emails regarding the scandal.
The emails show dozens of PwC partners and staff around the world had been copied into emails regarding the Collin’s scheme.
Yet every name – except that of Collins – has been redacted from the emails.
PwC is refusing to disclose the names, despite heavy pressure, including from O’Neill, who yesterday accused the consultancy of an ongoing “cover-up”.
Greens Senator David Shoebridge, who has also been pursuing the matter, said Jordan’s statements were “damning”.
“This information in (the ATO’s) opening statement is extraordinary and damning,” Shoebridge posted to Twitter.
“Distinct sense of frustration about how hard it has been to get action on PwC until now”.
Serious concerns have been raised over a “shadow public service” of private consultants having been created in recent years.
Earlier this month the Federal Government released a bombshell audit which found that in 2021-22 — the final year of the Morrison Coalition Government – private businesses were paid a massive $20.8 billion to deliver public services.
This “shadow public service” was equivalent to almost 54,000 full-time workers, compared to the about 144,000 in the Australian Public Sector workforce.
The “Big Four” consultancies – PwC, Ernst & Young (EY), Deloitte and KPMG – are all major “donors” to both major political parties.
From NSW Police Commissioner to PwC Partner, Mike Fuller. Source: LinkedIn
The Centre for Public Integrity, an anti-corruption think tank founded by former top judges, last week released a report showing government contracts to the “Big Four” consultancies had exploded by over 400 per cent over the past decade, to $1.4bn in 2021-22.
It found the four private consultancies had “donated” $4,289,253 to the ALP and Coalition over the past decade, with those payments surging from $388,200 in 2012-13 to $520,081 in 2021-22.
“While business has boomed for the Big Four, the Australian Public Service – one of the pillars upon which our Westminster democracy depends – has been left with static staff numbers and a diminished policy capability,” the report says.
Further concerns have been raised about a “revolving door” between politicians, senior public servants and the Big Four consultancies.
In August last year, after a “35-year career working for the NSW Police Force”, former NSW Police Commissioner Mick Fuller joined PwC as “a partner in the Government Consulting Practice”.
Help us get the truth out from as little as $10/month.
The need for fearless, independent media has never been greater. Journalism is on its knees – and the media landscape is riddled with vested interests. Please consider subscribing for as little as $10 a month to help us keep holding the powerful to account.