SYDNEY: The Australian government should be required to disclose every consulting contract worth over A$2 million (US$1.33 million) and contracts should include a requirement that providers act in the public interest, said a senate inquiry sparked by PwC's leak of secret tax plans.
The country should also set up a public register of conflicts of interest for consulting firms, and overhaul the rules for large partnership-based organisations which aren't covered by corporate laws and regulators, the inquiry added in a report published late on Wednesday.
The recommendations are a first step in tightening the rules around how Australian government departments hire consulting firms after media reports in 2023 said a former PwC partner shared confidential, unpublished tax proposals to win work with global companies looking to restructure domestic tax affairs.
"The PwC tax leaks scandal, and the wave of ethical failures subsequently exposed at other large consulting and audit firms, has struck at the very core of Australians' faith in the integrity of corporate Australia," said Senators Deborah O'Neill and Louise Pratt, of the governing centre-left Labor party, in the report.
The inquiry was limited to contract procurement and later inquiries would investigate "the fundamental ethical malaise of Big Four Firms, and the importance of addressing structural challenges within the sector", the senators added.
A PwC spokesperson said the organisation would consider the report, without commenting further.
The report said Australia's government spends the most in the world relative to the size of the economy, or more than A$1 billion a year, on consulting services, mostly contracts with PwC, EY, KPMG and Deloitte.
But the spending has not improved public service efficiency by some metrics and has raised concerns about transparency and value for money, the report added.
It recommended the finance minister be required to give twice-yearly statements detailing each consulting contract worth over A$2 million, including dollar value, subject matter and conflicts of interest which appear during the contract
The report said organisations with a partnership structure were not answerable to Australian corporate law or the Australian Securities and Investments Commission but sometimes struggled with governance. It recommended a review of legal frameworks for partner organisations with over 100 partners.