The head of Treasury says the PwC tax scandal is “clearly disturbing” but there is “no cause for concern” over government contracts with the disgraced firm, despite calls for a ban.
PwC is embroiled in a tax scandal after using confidential Treasury information to benefit its clients.
It has led to the resignation of the firm’s chief executive and on Monday nine of its partners were told to take leave.
However, Treasury boss Steven Kennedy has defended the federal government’s lucrative contracts with PwC.
Steven Kennedy confirmed the embattled company was providing auditing services to his department via a $995,000 contract.
He told a Senate estimates committee on Tuesday there was “no cause for concern” regarding the delivery of these services.
PwC has been under fire after a former partner was caught leaking confidential Treasury information about tax changes with colleagues.
This information was then used to attract new business with companies keen to avoid paying tax.
Tuesday’s developments came as it emerged that the Department of Defence appeared to have signed contracts with PwC after the confidentiality breach came to light.
During a parliamentary hearing, Greens senator David Shoebridge asked Defence officials if the department was aware it had entered into two contracts since the confidentiality breach emerged earlier this year.
Official procurement data indicates Defence signed a $142,499 contract with PwC for audit services, starting on May 8, and another for asset accounting services worth $139,745, starting on May 12.
The Defence officials were not aware that this had occurred and promised to seek information and respond later.
The committee was also told the department has 54 contracts with PwC, totalling $223.3 million.
The Greens have been putting pressure on the government to ban and cancel contracts with the firm.
Another Greens senator, Barbara Pocock, said on Tuesday there should be a ban on any new contracts with PwC and a pause on those existing contracts where there could be a perceived conflict of interest.
While the government is not able to scrap existing contracts, any PwC staff involved in the scandal have been ordered to step away from Commonwealth work, at least until the internal investigation into the breach is finished.
Greens senator Nick McKim asked how Treasury could have confidence in the firm’s advice on governance following the discoveries.
“We can only comment on our experience with the auditors that have been engaged with us for some time in Canberra office from PwC,” Dr Kennedy said.
But the Treasury secretary said the department would think carefully about any future contracts with the firm.
“We’re going to very carefully consider our future procurement arrangements as they come up, but we’re going to act in line with the advice provided to us from the finance department.”
Finance Minister Katy Gallagher said the government was not in a position to cancel contracts with the firm because the breach was part of stakeholder consultation and not a formal procurement process.
“We have taken a number of steps, but this was not a breach of procurement,” she said.
On Tuesday, Department of Defence associate secretary Matt Yannopoulos confirmed that none of the individuals named in the leak have ever worked for the agency.
“We had assurance from PwC last week and we had assurance again yesterday,” he said in a hearing.
The Department of Social Services confirmed it had three active contracts with the firm and that it had reached out for assurance no one involved in the breach was working with the agency.
The agency is waiting to hear back from the firm on the matter.
The consultancy giant has launched an internal investigation into the information leak incident and the broader culture at the firm, and on Monday, announced it was standing down nine partners.
-with AAP
