PwC tax scandal
Further revelations came to light that have implicated other organisations in the Australian public service and consulting industry, and which became the focus of a broader discussion about government outsourcing.
[2] A Senate Committee concluded that PwC had engaged in a deliberate strategy over many years to cover up the breach of confidentiality.
[9] The general trend has been described as privatisation by stealth, especially for firms with a clear vested interest, like Deloitte, EY, KPMG, PwC influencing tax law.
[10] Luke Sayers served as CEO of PwC Australia between April 2012 and May 2020,[11] the breaches by Peter Collins took place during this period of time.
[16] However, Collins violated these agreements, sharing confidential Treasury information with at least 53 partners at the firm, including in the tax advisory arm.
[22] The ATO wanted to investigate the situation to determine how the scheme could have been developed so quickly, especially given that some of the corporations were clients of PwC.
The ATO inquired about its suspicions with PwC on multiple occasions, sending at least 46 formal notices to provide information, and raising their concerns directly with then chief executive Luke Sayers.
[32] This was despite internal warnings to PwC's board of directors that Seymour was a risky pick, given his history in the company's tax practice.
The article prompted a response from treasurer Jim Chalmers decrying the alleged conduct as "an appalling breach of trust."
[39] The CEO of PwC Australia, Tom Seymour, stated that he was deeply disappointed and the firm had taken action to protect against this happening again.
[44] Contrary to CEO Tom Seymour's previous statements, the emails revealed that the scheme was known to at least 53 PwC partners.
On 24 May 2023, the Secretary to the Treasury, Steven Kennedy, referred the PwC matter to the Australian Federal Police (AFP) for a possible criminal investigation.
David Shoebridge, in the Senate on 21 June 2023 targeted PwC over documents that show how it won a contract with the AFP.
Both Fuller and Kershaw met on the 28 July 2022 about the crafting of a contract for PwC to review the Australian Federal Police operations in the ACT.
[49][50][51] Senator Shoebridge raised serious concerns over the issue of a perceived, or apparent, conflict of interest on the part of the AFP's commissioner.
[56] In October 2024, the AFP raided PwC's head office in Sydney after a joint parliamentary committee found its international arm was withholding critical information about the scandal.
[57][58] When the story went public in January 2023, PwC stated that a single partner was responsible for the breach, and reiterated that it has "procedures and policies...to prevent this occurring".
[61] It admitted to multiple abuses of confidential information and other malfeasance identified by the ATO, and determined that the failure lay with the firm's leadership and governance.
Scyne's remuneration model consists of base salary and bonuses, as well as equity in the firm, rather than a direct share of yearly profits.
[66] A “high-performance, results-focused culture has been used as an excuse to justify poor behaviour”, and “Some rainmakers were described as the ‘untouchables’ or individuals to whom ‘the rules don’t always apply’.” An “aggressive growth agenda overshadowed and occurred at the expense of the firm’s values and purpose” and contributed to a culture of "growth at all costs"[66] The report highlighted PwC's deceptive public image: “PwC Australia's glossy PowerPoint presentations sometimes give a false impression of comprehensive and disciplined structures and processes when the reality is much less tidy” The firm paid two law firms to investigate the tax leaks, but made no commitment to release the results publicly.
[68] Labor Senator Deborah O’Neill countered that “PwC Global were aware of this misconduct for a significant period of time.” O'Neill called the review a corporate cover-up,[69] while Greens senator Barbara Pocock called for PwC to be banned from future contracts, and said she would refer the company to the National Anti-Corruption Commission when it commences operation.
In June, the Authority sought assurance that PwC had not breached its confidentiality agreements, referring the contracts to its audit committee.
[85] Mike Pezzullo, the secretary of the Department of Home Affairs, stated the scandal demonstrated the need for a National Anti-Corruption Commission, a government body that had recently been introduced.
[96] There was speculation that other Big Four companies could follow PwC's lead and separate their consulting and auditing arms, in order to resolve the conflict of interests between the two.
[99] In December 2024, the government passed world-leading tax transparency laws, which require multinational corporations to disclose their revenue in each region.
