PwC to remove staff involved in Australia tax leak scandal from govt work

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FILE PHOTO: Logo of Price Waterhouse Coopers of PWC office in Berlin

By Lewis Jackson and Renju Jose

SYDNEY (Reuters) -PricewaterhouseCoopers (PwC) has agreed to remove staff with links to the leak and use of confidential Australian tax plans from government work, a senior government official told an inquiry on Thursday.

The accounting firm is embroiled in a national scandal over its use of confidential information about proposed tax laws to drum up business. The Australian Treasury referred the matter to police for a criminal investigation on Wednesday.

Finance Department Secretary Jenny Wilkinson told a Senate committee that PwC had agreed to remove staff “directly involved and with knowledge” of the breach from current and future contracts until it wraps up an internal review in September.

A PwC spokesperson declined to comment.

The firm has earlier said it was “committed to learning from our mistakes” and it would continue to cooperate fully with any investigations into the matter.

Wilkinson said she considered “PwC’s abuse of confidence and trust with the Treasury and PwC’s subsequent handling of this breach to be a very serious issue”.

She also proposed adjusting future contracts to give the government more power to scrap contracts, amid mounting calls for the cancellation of PwC Australia’s existing government contracts and a ban on more work in the wake of the scandal.

Home Affairs Minister Clare O’Neil said earlier in the day the government cannot cancel existing contracts with the auditor due to legal constraints.

“We face legal constraints around existing contracts, but I can tell you there is some furious work going on within government to understand what the legal constraints are on us here,” Home Affairs Minister Clare O’Neil said on ABC Radio.

The Australian federal government has committed to contracts worth A$255.2 million ($173 million) with PwC in this financial year as of May 16, a finance committee official told the Senate committee.

TAX DOCUMENT LEAK

An Australian government body in January said a former tax partner at PwC shared with colleagues confidential information gained from his advisory role with the government.

His work centred on new tax rules being developed to stop multinational companies from avoiding tax by shifting profits from Australia to tax and secrecy havens.

Hundreds of partially redacted emails between tens of PwC partners tabled in parliament this month showed the information was discussed across the firm and used to pitch for work.

“I ask that you don’t circulate it beyond us or discuss it outside PwC – it would really put PwC Australia and me in a real bind,” said one partially redacted email.

PwC’s Australia CEO stepped down this month after revealing he had also received the sensitive information.

The scandal is not the first to claim a senior scalp at one of the Big Four accounting firms, which also include EY, Deloitte and KPMG.

EY Germany head stepped down in 2021 over the firm’s auditing of technology firm Wirecard, which collapsed in a fraud scandal.

($1 = 1.4743 Australian dollars)

(Reporting by Lewis Jackson and Renju Jose; additional reporting by Stella Qiu in Sydney; Editing by Himani Sarkar)

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