Details of the lengths that PwC went to to deflect investigations into the tax leak scandal have been aired at an inquiry, including the use of tens of thousands of claims of client privilege.
Officials from the Tax Practitioners Board also revealed to the Senate inquiry on Wednesday that former PwC partner Peter-John Collins had attempted to tender his registration during the investigation but the board refused it.
Instead, the tax board pursued Collins until it deregistered him in December for sharing confidential information obtained during consultations with Treasury about multinational tax avoidance.
The Senate’s finance and public administration committee is investigating the integrity of consulting services after the PwC scandal, which has been referred to the Australian federal police for investigation.
The Australian Taxation Office commissioner, Chris Jordan, has previously said the ATO became aware in 2016 of a “handful of multinationals suspiciously and quickly seeking to restructure” in response to a new multinational tax avoidance law.
Jordan told Senate estimates in May that the ATO’s efforts to investigate were hampered by inappropriate claims of legal professional privilege over communications.
The tax board’s secretary and chief executive, Michael O’Neill, on Wednesday revealed that these amounted to “tens of thousands of legal privilege claims”.
Legal professional privilege protects confidential communications and documents between a lawyer and a client.
O’Neill said the ATO had discussions with the tax board about the “alleged misconduct associated with those [claims], and so that’s another issue for our consideration”.
O’Neill confirmed the tax board has undertaken a new investigation with a “broad remit”, including “associated persons and associated entities” of others involved in the PwC tax leak.
The chair of the tax board, Peter De Cure, said that tax agents who were being investigated might offer to surrender their registration “as a tactic” but it is not obliged to accept.
“[Collins] did offer to surrender. We didn’t accept the offer – we went on with the investigation.”
Greens senator Barbara Pocock renewed calls for PwC to release the names of up to 72 staff and others involved in the tax advice scandal, after the Senate committee decided not to release them.
In a statement, Pocock said “anyone doing business with PwC needs to be fully aware of who was involved and the roles that they played in devising and marketing the multinational tax avoidance scheme”.
“I have repeatedly asked PwC to make public not just the names but the roles that each individual had in perpetrating this serious breach of trust against the Australian people,” she said.
“Instead of properly supporting their staff and clarifying the names and actions of those with real involvement, PwC has continued to frustrate and conceal throughout this episode.”
The chair of the committee, Senator Richard Colbeck, noted several times that the committee did not want to create “a pool of evidence that might be inadmissible because it’s been discussed in these proceedings” because of parliamentary privilege.
Earlier, the inquiry heard that Treasury took no extra steps to protect confidential information even after discovering in September 2018 that the ATO was investigating a possible breach by Collins.
Collins signed confidentiality agreements with Treasury in December 2013, April 2016 and February 2018, allowing him to have access to information on planned multinational tax avoidance laws.
Treasury officials told the hearing that they did not become aware of the PwC issue until September 2018 when the ATO contacted it seeking Collins’ agreements because of a “possible breach of confidentiality”.
Treasury’s deputy secretary of revenue, Diane Brown, said the ATO “could not tell us any details” because of secrecy provisions in tax law. She said there are times to re-assess if laws such as the secrecy provisions are appropriate and “we’re probably at one of those times”.
Asked by Pocock why Treasury took “no special steps” to respond the first assistant secretary of the international tax division, Marty Robinson, said the department had “very little information”, while Brown noted the ATO was investigating.
Pocock said she found Treasury’s response “very unsatisfactory” and she was “shocked” it was “sleeping at the wheel”.
