PwC has been banned from providing any new tax advice to the NSW government as the fallout from the consultancy firm's confidentiality breach continues.
The global professional services company will be temporarily suspended from obtaining new tax engagements under a suite of decisions by the NSW Treasury secretary.
The firm has been embroiled in an integrity scandal for months after a former partner was deregistered for sharing confidential Commonwealth briefings on multinational tax reform with partners and clients.
The alleged conduct of Peter Collins is now the subject of a federal police investigation.
An Auditor-General report in March revealed NSW agencies spent more than $1 billion on outsourced advice in the four years to 2021.
Yet, it found those agencies did not have systems for managing or evaluating consultant performance and the over-reliance on PwC and other Big Four consulting firms placed the government at strategic risk.
While PwC has said no NSW government engagement has been worked on by PwC staff implicated in the Collins matter, the firm will not be permitted to take on any future tax advice contracts until further notice.
The decision by Treasury Secretary Michael Coutts-Trotter will not affect any existing engagements.
PwC will have to attest each month that no staff member found to have breached confidentiality or otherwise misused information received in the course of the Collins matter is involved in NSW government engagements.
Conflict of interest and confidentiality terms for all professional services engagements will be reviewed for potential weaknesses.
That review began after the auditor-general's report.
Having already pledged to overhaul government rules on hiring consultants, Labor in May said it would consider multi-million fines for individuals and organisations that unlawfully breached government confidentiality.
"I was appalled by the breach of trust that occurred with the federal government," NSW Finance Minister Courtney Houssos said on Thursday
"As additional evidence comes to light we will continue to toughen our regime and protect the NSW community from this behaviour."
The crackdown comes as MPs on Thursday prepare to question Auditor-General Margaret Crawford and the head of the state procurement agency about the use of consulting services.
The parliamentary inquiry will examine, among other things, the use of 'consultant shopping' and the poor public policy outcomes that have arisen from such practices.
