By Lewis Jackson
SYDNEY (Reuters) -Australia’s Treasury department may not renew a A$1 million audit contract with PricewaterhouseCoopers (PwC) when it ends this year, an official told a senate hearing amid a scandal over the firm’s misuse of confidential government tax plans.
The global professional services firm is reeling after a former Australian tax partner who was consulting with the government on laws cracking down on corporate tax avoidance shared confidential drafts with colleagues to drum up business.
Amid calls to ban the firm from lucrative government contracts, Treasury Secretary Steven Kennedy told senators on Tuesday the breach was “clearly disturbing” and the department would review a PwC audit contract worth almost A$1 million that expires at the end of this year.
“We’re going to very carefully consider our future procurement arrangements as they come up,” said Kennedy, whose department last week referred the broader breach to police.
PwC did not immediately respond to a Reuters request for comment on the audit contract.
Kennedy defended consulting with external tax experts, saying it did not make sense to cut off a large expert community as long as conflicts of interest were managed.
Treasury officials told senators confidentiality agreements had been updated and the department had written to PwC and 25 other firms to ask whether their governance processes were suitable for confidential tax consultations in the wake of the PwC tax leak.
The firm’s acting CEO Kristin Stubbins, who took the job after her predecessor resigned over the scandal earlier this month, on Monday apologised in an open letter and said nine unnamed partners had been directed to take leave.
However the firm did not name the dozens of staff and multiple clients referenced in a cache of emails that show how confidential drafts of new rules were used to seek work with U.S. technology companies, among others.
Greens Senator Barbara Pocock, who unsuccessfully tried to present a list of 36 names in the emails on Friday, told the committee PwC had not acted in good faith during government tax consultations.
“I see a case of aggressive harvesting of confidential information and relationships by a predatory group of tax avoiders salivating at the way in which they can make money out of these very large tax-avoiding multinational companies,” she said.
Stubbins’ open letter on Monday said at the time of the tax policy leak, “there was a culture of aggressive marketing in our tax business” and some of the group’s leaders “allowed for profit to be placed over purpose”.
(Reporting by Lewis Jackson in Sydney; Editing by Sonali Paul)
