PwC apology doesn’t stop senators demanding names of those involved

Senators will push for further disclosure of the names of people involved in PwC’s tax leak scandal as the prime minister said the company’s behaviour was “completely unacceptable” after it apologised for its conduct and stood down nine partners who received emails related to the affair.

Labor senator Deborah O’Neill said PwC’s apology for betraying the trust of the federal government and the Australian public was inadequate and will not be enough to help the consulting giant win future government contracts.

PwC acting CEO Kristin Stubbins said while investigations were still under way, the company knew enough about what went wrong to take some immediate action.

Ryan Stuart & supplied

PwC’s acting head Kristin Stubbins apologised on Monday, and admitted the culture within the company had “allowed for profit to be placed over purpose”.

“I want to apologise on behalf of PwC Australia. For sharing confidential government tax policy information and for betraying the trust placed in us,” she said.

“[It] is clear, in hindsight, that PwC Australia did too little, too late.”

The firm has stood down nine partners pending the outcome of its investigation. The chair of PWC’s governance board, Tracey Kennair, and the chair of that board’s risk committee, Paddy Carney, also stepped down from their roles amid concessions the firm “did not have adequate processes and governance in place”.

Tracey Kennair has stepped down from her role as chair of PWC’s governance board.

Eamon Gallagher

Stubbins said PwC has started to ringfence the work it does for the government, following a Finance Department directive effectively banning the company from winning new government contracts in the wake of the tax leak scandal.

O’Neill dismissed the apology as more of the same from PwC, pointing to the fact the company did not name the nine partners it had put on immediate leave. She said it did not rebuild the trust needed to undertake government work.

“Trust has absolutely evaporated. And the kind of governance and cultural change that is going to be necessary before that trust can be rebuilt was not what we saw today in the statement from PwC,” she said.

“The thing that really signifies their insincerity is a failure to name the nine people. It’s inexplicable to me that they wouldn’t do that.”

Greens Senator Barbara Pocock tried to table a list of 36 PwC partners who had knowledge of the leak.

Alex Ellinghausen

This week top officials from Treasury, the Tax Office and the financial regulator will be grilled in Senate estimates about what they knew of the tax leak scandal and the Tax Practitioners Board investigation, and what is being done to prevent such behaviour from occurring again.

Greens senator Barbara Pocock said it was time for a bigger clean up, and several government entities including the Tax Practitioners Board will be questioned about their own handling of the scandal in estimates this week.

“There are serious questions to be answered now, by PwC, the TPB, Treasury, and the ATO about the long timeline of this case, the nature of the penalties imposed and their adequacy, and the capability of the TPB itself,” she said.

“Our call for a full independent inquiry into the exact involvement of everyone who had knowledge of this becomes more pressing by the day.”

Prime Minister Anthony Albanese said the country deserved full transparency over the leak.

“I don’t want to pre-empt any of those processes. I think in the fullness of time, of course, there needs to be proper transparency about all of this,” he said on 2SM radio.

“But quite clearly, what went on there is completely unacceptable.”

Asked whether PwC should be banned from any government work, at least for a period of time, Albanese said its behaviour needed to be considered.

“Well, certainly what we have said is that any government department undertaking work needs to bear in mind the ethical considerations that come from this PwC behaviour,” he said.

The tax scandal was referred to the AFP for investigation last week, and the head of the Finance Department revealed the firm was ordered to remove all staff with links to the incident from government work.

In December, the Tax Practitioners Board found Peter Collins, PwC’s former head of international tax, shared confidential government briefings on multinational tax reform with PwC partners and clients to help them sidestep the laws. A 144-page document tabled in Senate estimates on May 3 showed dozens of staff had received emails containing confidential information.

In an open letter on Monday, PwC Australia’s acting chief executive apologised for the firm’s behaviour, saying the company had failed in three ways.

Stubbins said there had been a clear lack of respect for confidentiality, the firm did not have adequate governance processes in place, and there was a culture in the firm’s tax business that had allowed inappropriate behaviour.

Stubbins said that at the time of the tax leak, there was an aggressive marketing culture within PwC’s tax business.

“Over a period, this aggressive behaviour and drive for growth permeated certain parts of our leadership and allowed for profit to be placed over purpose,” she said.

Governance expert Ian Ramsay, professor at the University of Melbourne’s law school, said it was unclear if Monday’s announcement from PWC would cauterise the damage for the firm, which had so far been too slow to respond to the rolling scandal.

“It’s clear that they have only responded in the way they have because of public pressure,” Ramsay said.

Ramsay said there were similarities between the PwC affair and past scandals at Australian banks and casinos, which also saw their reputations battered.

“Of course we can think back not too many years to when our big banks were subjected to the Hayne [royal] commission,” Ramsay said.

PWC has appointed business leader Ziggy Switkowski to conduct a review into the firm’s culture and governance, and on Monday it said it would publish his report and findings in full.

Deborah O’Neill said there was no transparency in PwC’s apology.

Alex Ellinghausen

But University of Wollongong associate professor of law Andy Schmulow said PwC should go further, and establish a trust that could appoint independent people such as former judges to probe the scandal.

“The best thing they could do is run a review process that’s credible and that has the confidence of the public,” Schmulow said.

Last week in Senate estimates, Pocock tried to table a list of 36 PwC partners who she said had received emails related to the leak. Both Pocock and Labor senator Deborah O’Neill questioned how the Finance Department could trust the company to remove all staff involved if the government did not know the names of those partners.

“Any claims to want to be transparent can only be taken seriously when they reveal the 53 names,” O’Neill said on Monday.

But Stubbins said the company believed the “vast majority” of staff who received emails relating to the leak were not knowingly involved in, or responsible for, any confidentiality breach.

“We have and will continue to take appropriate action against anyone who is found to have breached confidentiality or failed in their leadership duties,” she said.

The scandal also threatens PWC’s standing with its big business clients, and on Monday the reported Lendlease had paused a tender process to appoint an auditor.

Co-founder of proxy advice firm Ownership Matters Dean Paatsch said: “It won’t be losing too many audit clients, but it won’t be winning much new business.”

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