One of the world’s largest financial consulting firms, PricewaterhouseCoopers (PwC), has been referred to Australia’s Anti-Corruption Commission (NACC) after a government inquiry revealed the company allegedly planned to cheat the Australian government out of tax revenue from the firm.
Greens Senator Barbara Pocock, who initiated the senate inquiry, announced she will be referring the company to the NACC over the scandal.
“This is a serious matter of misconduct involving a company that has multiple government contracts worth hundreds of millions of dollars,” said Pocock.
“It’s beyond comprehension that the government would leave this matter to a review by an ‘independent’ investigator appointed by the company itself, as proposed by the PwC CEO, Tom Seymour, just days before he resigned in disgrace.”
The tax scandal surrounding PwC was revealed after the federal Tax Practitioner Board (TPB) disqualified a former PwC government consultant, Peter-John Collins.
According to the TPB, Collins had been employed by the federal government as part of the Base Erosion and Profit Shifting (BEPS) Tax Advisory Group to advise the government on legislation and policy positions intended to give effect to the Organisation for Economic Cooperation and Development BEPS provisions, including the Multinational Anti-Avoidance Law, the Diverted Profits Tax and Hybrid mismatch rules.
As part of his role, he received confidential information and documentation that was meant to be kept confidential. However, Collins shared the secret knowledge within PwC and with overseas partners, allowing the firm to create a system that enabled large companies to avoid paying the newly devised taxes.
Following a 2022 parliamentary inquiry into the management and integrity of the government consulting services, internal emails from the PwC allegedly revealed that company executives had bragged about the system and utilised it as a selling point for its services.
The revelations left Treasurer Jim Chalmers furious.
“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,” he said.
“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. ”
The treasurer said he would seek advice on advice from both the treasury department and the Australian Tax Office for any additional steps that should be taken to protect the integrity of Australia’s tax processes.
PwC was reported by the Australian Financial Review (AFR) to have received $537 million (US$358 million) in federal government contracts during the past two years.
The Chief Executive Office of PwC, Tom Seymour, stepped down on May 9 “effective immediately,” PwC told ABC in a statement.
“We have appointed our Assurance Leader, Kristin Stubbins, to serve as acting CEO,” the statement read. “In the coming months, a new CEO will be elected by the Partners. We agreed with Tom that this is in the best interests of the firm and our stakeholders.”
Calls for Finance Minister to Act
Senator Pocock is calling for PwC to face real-world consequences and not just “reputational damage.”
“Why hasn’t Finance Minister Katy Gallagher acted on this?” Pocock said.
“I wrote to Minister Gallagher on 1st March asking her to remove PwC from the Management Advisory Services Panel, which gives them access to government contracts, because they have failed to meet the criteria to be included on the basis of risk, compliance and benefit.
“In reply, she said she has the power to immediately ‘suspend or terminate a supplier from the panel.’ A power she has refused to exercise. What further revelations will it take for the Minister to act?”
Pocock said that the Greens party room had approved her decision to refer the matter to the NACC and that the party will also be looking at the procedures to make this happen as quickly as possible.
“Corruption on this scale is what NACC is for. This matter should be top of its agenda when it opens for business on 1st July,” she said.
“This company has made millions selling secret Government information to help its multinational clients minimise tax. If that’s not corruption, I don’t know what is.”
Under the National Anti-Corruption Commission Act 2022 (also known as the NACC Act), the heads of federal government agencies and parliamentarians are obliged to refer potential corruption issues—which does include the misuse of information—to the NACC for potential investigation.
The Epoch Times has reached out to the finance minister to find out if the federal government will be referring the PwC matter to the NACC.
The senator noted that in addition to the departure of Collins, PwC has also had three more partners resign from their leadership positions after being identified for their roles in this scandal.
“We know that there were potentially 40 to 50 more PwC operatives involved. We need to know exactly who else inside PwC played a part or had knowledge of the scam, which companies benefited from it and how much the Australian public was ripped off in missed tax revenue,” Pocock said.
“And we need to ask whether we are only looking at the tip of the iceberg. We need to know much more about the huge, opaque consulting industry at large.”
