What has PwC been up to in Australia?
Consulting firm PwC is accused in Australia of leaking classified information to help multinationals evade taxes. All the details of the scandal
Problems for PwC, the second largest consulting firm in the world.
PricewaterhouseCoopers, British, is in fact at the center of a major scandal in Australia due to a leak of confidential information that could jeopardize its activities in the country: the CEO of the Australian division of the company has resigned, nine partners have been suspended while waiting for the conclusion of an internal investigation, the local newspapers are insisting so much on the news and there are those who are asking that state and federal institutions rely less on external consultants.
All the details.
THE PWC SCANDAL IN AUSTRALIA: WHAT HAPPENED
The scandal – as reconstructed by the Straits Times , one of the most authoritative Asian newspapers – stems from the discovery that an ex-partner of PwC, Peter Collins, disclosed confidential information to colleagues on changes to Australian tax rules so that the company could organize itself advance and get new business, especially from technology companies.
Collins obtained this information in 2015, when he was a consultant to the Australian federal government precisely on the matter of contrasting tax avoidance by multinationals. He had signed three non-disclosure agreements.
WHAT THE TREASURY SAID
Upon becoming aware of the leak , the Australian Treasury has notified the Federal Police who have launched a criminal investigation. Treasury Secretary Steven Kennedy called PwC's conduct "alarming", specifying however that the company "has not let us down systematically and on an ongoing basis". Nonetheless, he thinks it is necessary to reform the rules for auditors and increase the fines for violations in order to avoid similar situations from happening again.
THE OTHER REACTIONS
The Australian Tax Office told a parliamentary committee on Tuesday that PwC has developed a series of schemes to help multinationals avoid taxes. According to estimates by the government agency, these schemes jeopardized around A$180 million in annual tax revenue.
Deborah O'Neill, an MP for the ruling Australian Labor Party, spoke out particularly harshly against PwC, accusing her of trying to cover up the scandal and of "not being open and honest with the Australian people". Asked by ABC News whether the Australian public sector will be able to trust PwC again, she replied : "How could we ever trust them?"
WHAT PwC IS WORTH IN AUSTRALIA
PwC has eight thousand employees in Australia (out of approximately 328,000 globally) and provides legal and tax advisory services to more than five thousand clients. The scandal has not only damaged its reputation, but that of all consultancies working with the public sector.
The former Australian government spent nearly A$21 billion on external consultants between 2020 and 2021; the current one has promised to reduce their use, after calling them "shadow workforce". PwC has contracts with federal institutions, including the Department of Defence, worth A$453 million.
Australia's most populous state, New South Wales, spends around $175 million a year on consultants. Following the scandal, he said he would impose multimillion-dollar fines on anyone who leaks confidential tax information.
However, the Australian government cannot terminate existing contracts with PwC, but the company may struggle to win new ones once this leak story is resolved internally.
– Read also: In defiance of conflict of interest, the EU has entrusted PwC with a study on antibiotic resistance
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/scandalo-pwc-australia/ on Wed, 31 May 2023 10:27:20 +0000.