The Consultancy firm PwC will be paid $8.7m to collect sensitive commercial data from aged care providers while helping the Australian government set new service prices, despite simultaneously charging the industry for advice on pricing.
Senators and unions have warned the contract, which could give PwC access to protected pricing information subject to secrecy provisions, is fraught with potential conflicts of interest that may be difficult to avoid.
An email from the Independent Health and Aged Care Pricing Authority’s (IHACPA) acting chief executive, Joanne Fitzgerald, confirms PwC is conducting a large-scale costing study to “inform pricing for residential aged care services from July 2024”.
PwC will collect “cost and activity data” from facilities across the country and develop a new costing framework for the federal government.
At the same time, another division in PwC is selling consultants to the aged care industry who can “benchmark your organisation against others in the industry”, or “assist service providers to remain viable and accountable to their service costs and pricing”.
PwC’s work with government is under renewed scrutiny after the global firm allegedly profited from sharing confidential government tax policy with clients. This $8.7m contract with IHACPA was signed days before those allegations were first published by the Australian Financial Review.
The Greens senator Janet Rice asked the federal government what measures it had in place to ensure PwC would not commercialise any insider knowledge and experience gained from its work for the IHACPA.
“In undertaking this work, all members of PwC who are involved in the project were required to sign a deed of confidentiality that prohibits disclosure of any confidential or sensitive information in relation to the project,” a government spokesperson said in response to Rice’s question.
“In the event of a breach of this deed, IHACPA has remediation plans in place focusing on the level and nature of the risk. This may include removal of individuals from the project, mediation between the parties or if an agreement cannot be reached, termination of the contract.
“Additionally, should the breach involve protected Pricing Authority information, PwC staff may be subject to financial and custodial penalties under the secrecy provisions of the National Health Reform Act 2011.”
The government spokesperson said PwC was required to immediately disclose any conflicts of interest and failure to do so could result in the contract being terminated.
But Rice said relying on PwC to disclose conflicts of interest was not an adequate response given its extensive work with the aged care industry.
“I am incredibly concerned about PwC’s access to confidential information given the scandal that’s playing out with its breaches of confidentiality,” Rice said.
“We need to have a ban on contracts with PwC given the tax scandal that’s still playing out in the media. They should not be given contracts that provide access to such confidential information while they are still under such a cloud.”
A PwC spokesperson would not comment on the IHACPA contract, but stressed the firm had “strict conflict and risk management processes” that were “always followed rigorously before an engagement is commenced”.
In a submission to an ongoing inquiry into the government’s use of consultants, PwC’s chief executive, Tom Seymour, apologised for the tax policy breach reported in January.
“We have taken extensive steps to both raise awareness of the significance of these issues across all partners and staff in the firm and have invested further in policies and training which address these matters to protect against future recurrence,” Seymour said.
The government argued public servants do not have the time or expertise to complete the IHACPA project before deadline.
The Community and Public Sector Union has long been opposed to the outsourcing of government work to contractors and the potential for conflicts of interest.
“As far as the CPSU is concerned, the way consultants are currently engaged by government violates the standards and expectations laid out in the APS code of conduct,” said CPSU’s assistant national secretary, Michael Tull. “This is unacceptable.”
