The Labor senator Deborah O’Neill has warned that anything short of PwC naming all 53 partners involved in the tax advice scandal will be a “continued obfuscation and coverup” after the embattled consulting firm directed nine unnamed partners on leave.
O’Neill made the comments to Guardian Australia after PwC claimed to have “ringfenced” its government work and apologised to the public in a bid to stem the damaging fallout from the tax advice scandal.
The actions were announced by PwC Australia’s acting chief executive, Kristin Stubbins, on Monday after Anthony Albanese said the sharing and use of confidential tax policy information was a “terrible indictment” on the company.
PwC has been under pressure since January when the Australian Financial Review first reported that the firm’s former head of international tax, Peter Collins, had been deregistered as a tax agent for sharing the confidential information with colleagues.
Stubbins apologised on Monday for “betraying the trust placed in us”.
“Specifically, I apologise to the community; to the Australian government for breaching your confidentiality; to our clients for any questions this may have raised about our integrity and trustworthiness and to the 10,000 hard-working, values-driven PwC Australia partners and staff who have been unfairly impacted.”
Stubbins acknowledged the firm “did not have adequate processes and governance in place”, and had a culture in its tax business that “both allowed inappropriate behaviour and has not, until now, always properly held our leaders and those involved to account”.
PwC announced that nine partners will go on leave “effective immediately”.
The firm said it was moving to ringfence its government work “to minimise conflicts of interest and enhance governance”. That will include a standalone executive and governance board to cover all services to federal government departments and agencies.
The chairs of its governance board and designated risk committee have decided to step down from their roles, the company said, and it has appointed two independent, nonexecutive directors to its governance board.
PwC also committed to publishing in full the details of an independent review by Ziggy Switkowski into the company’s operations and culture. The company had faced criticism for initially promising to only share a summary of the key recommendations of the report, due in September.
But Stubbins disputed what she called an “assumption by some that all those whose names have been redacted” in internal PwC emails released by the Senate on 2 May “must necessarily be involved in wrongdoing”.
“That is incorrect. Based on our ongoing investigation, we believe that the vast majority of the recipients of these emails are neither responsible for, nor were knowingly involved in any confidentiality breach.”
Stubbins also claimed that in relation to the breach of confidentiality, “our clients were not involved in any wrongdoing and no confidential information was used to enable clients to pay less tax”.
O’Neill said the actions were “more coverup”. “How can you take seriously a declaration they’re transparent when they’ve said they’ve put nine people on holidays, and haven’t named anybody?”
“There’s only one thing PwC can do to begin to redress the loss of trust: release the names.”
O’Neill warned partners may have “moved on” and could hold other positions of trust like “at the head of an international audit assurance board for standards in the profession”.
“I don’t think anyone can have confidence in the governance of PwC,” she said, citing the firm’s opposition to operational separation of government and non-government practices when they fronted a 2019 parliamentary inquiry.
On Friday the Greens senator Barbara Pocock attempted in a Senate committee to table a list of partners and former partners of PwC she said were “involved”, but the hearing was suspended to seek advice from the clerk of the Senate. Pocock said there was a “strong public interest” in the names being in the public.
But O’Neill warned against tabling an unverified list, saying she would want to “inadvertently give protection to people involved in this shameful episode”.
Albanese on Monday told 2SM radio that “all of this should become public at the appropriate time, of course there are investigations under way and I don’t want to say anything to interfere with those processes”.
“Quite clearly, what went on there is completely unacceptable,” the prime minister said.
Albanese said that “in the fullness of time, of course, there needs to be proper transparency about all of this”.
He said that although the tax consultation with PwC was “something that occurred under the former government” he accepted that “no one in the former government I’m sure knew about it”.
“This is the fault of PwC.”
Asked about the potential for PwC to lose its commonwealth contracts – which are currently worth $255m – Albanese said that “any government department undertaking work needs to bear in mind the ethical considerations that come from this PwC behaviour”.
Last week the head of Treasury referred the PwC matter to the Australian federal police for investigation. The finance department has ordered that staff “directly involved in, or who had knowledge of, the significant breach” be stood down, to which PwC has agreed.
The PwC scandal will be examined further in Senate estimates this week, with Treasury officials present on Tuesday and Tax Practitioners Board officials on Wednesday.
The hearing will likely focus on reports about divisions within the board about whether to release information about the scandal.
