Finance Minister Katy Gallagher believes the public service can ease its reliance on consultants in the wake of the PwC tax advice scandal.
The comments were made as consultancy firms and federal government departments are set to be grilled on integrity practices by a Senate committee on Wednesday.
The inquiry was sparked after the discovery of a potential breach of treasury confidentiality by former PwC partner Peter Collins, who has been referred to federal police to investigate the allegations.
The integrity of other consultancy firms that secure government contracts worth billions every year is being investigated by the committee.
Senator Gallagher said a shift back to reliance on the public service would save money and lead to better outcomes.
“I think we can (change the reliance on consultants) and I think we have to,” she told ABC Radio on Wednesday.
“We saw a shift towards outsourcing, essentially public service jobs into the private sector and outsourcing that responsibility.”
Representatives from the tax office, treasury, finance department and Tax Practitioners Board will front the inquiry’s second hearing on Wednesday.
Consultants from audit, tax and advisory firm KPMG will also be questioned.
In a submission to the inquiry, KPMG said integrity was at the core of its approach to its services.
The firm commissioned a review of its confidentiality processes which found policies and procedures were consistent with best practice.
“When government engages with us, we never take this trust for granted and we must, and do, take our responsibilities seriously,” the submission said.
“Although we are confident in our policies and procedures as they relate to our confidentiality obligations … we remain vigilant in regularly reviewing our operations to ensure they remain aligned with community attitudes and expectations.”
The use of external consultants to complete public service work has been under the microscope after allegations emerged about PwC’s conduct.
Senator Gallagher said the PwC scandal stressed the need to shift reliance away from consultancy firms.
“Obviously, the issues with PwC have highlighted that at an extreme end, but we’ve got a lot more to do to rebalance the public service to make sure that it’s there as the important institution that it was already always intended to be,” she said.
Treasurer Jim Chalmers said it remained to be seen whether there was a broader cultural problem within consultancy firms engaged by the government.
“Australians have got every right to be furious about what’s happened here,” he told reporters in Canberra on Tuesday.
“More broadly when it comes to the system … (the government’s) intention is to re-balance away from this over-reliance on contractors, consultants and external labour higher and to try to rebuild capacity in the public service.”
Greens senator Barbara Pocock said testimony at the most recent Senate estimates left many questions unanswered.
She hoped witnesses would shed more light on how the government manages conflicts of interest and confidentiality issues when outsourcing work to the Big Four consulting firms PwC, Deloitte, KPMG and EY.
“As we’ve seen with the PwC tax scandal, many of these firms attempt to work both sides of the street as they carry out policy work for the government while providing services to corporate entities working in the same field,” Senator Pocock said.
“We need to consider some of the big questions in the professional services industry including the value we get from outsourcing public sector work to private firms and what this practice does to the capacity of the public service.”
– AAP
