The Australian government is considering taking criminal action against one of the world’s largest consulting firms PriceWaterhouseCooper (PwC) following revelations the company used confidential treasury information to create a system that enabled large companies to avoid paying Australia’s newly devised taxes.
“We’re all appalled (with) what’s gone on with PwC,” he told ABC’s The Business program.
“We want to send a very clear message to them and anyone else who is providing services to the government: that you cannot breach the trust of the government or the Australian people.
“So if criminal charges or other charges can be laid, we’re looking forward to the outcomes of that investigation from Treasury.”
The comments from the assistant treasurer follow remarks from Treasurer Jim Chalmers, which signalled that the federal government would be taking further action on May 22.“We’ve already taken some steps to change the way the Tax Practitioners Board operates. I think the PwC experience has been deeply, deeply troubling. And we’ve already taken some steps, but we will be taking further steps,” he said.
“I will have more to say about how we crack down on this behaviour, which is inexcusable, frankly, particularly when you consider that corporate Australia, for the right reasons, wants to be consulted on changes that impact them, and I want to do that too.
How the Scandal Unfolded
The tax scandal surrounding PwC was revealed after the federal Tax Practitioner Board (TPB) disqualified a former PwC government consultant, Peter-John Collins.According to the TPB, Collins had been employed by the federal government as part of the Base Erosion and Profit Shifting (BEPS) Tax Advisory Group to advise the government on legislation and policy positions intended to give effect to the Organisation for Economic Cooperation and Development BEPS provisions, including the Multinational Anti-Avoidance Law, the Diverted Profits Tax, and Hybrid mismatch rules.
As part of his role, he received confidential information and documentation. However, Collins shared the secret knowledge within PwC and with overseas partners, allowing the firm to create a system that enabled large companies to avoid paying the newly devised taxes.
PwC was reported by the Australian Financial Review (AFR) to have received $537 million (US$358 million) in federal government contracts during the past two years.
The Chief Executive Office of PwC, Tom Seymour, stepped down on May 9 “effective immediately,” PwC told ABC in a statement.
PwC To Be Referred to Anti-Corruption Commission
The possibility of criminal charges being pursued by the treasury department follows a decision by the Australian Greens party to refer the matter to Australia’s Anti-Corruption Commission (NACC).“This is a serious matter of misconduct involving a company that has multiple government contracts worth hundreds of millions of dollars,” said Senator Barbara Pocock.
Pocock, who initiated the senate inquiry into the PwC behaviour, said that the Greens party room had approved her decision to refer the matter to the NACC and that the party will also be looking at the procedures to make this happen as quickly as possible.
“Corruption on this scale is what NACC is for. This matter should be top of its agenda when it opens for business on 1st July,” she said.
“This company has made millions selling secret Government information to help its multinational clients minimise tax. If that’s not corruption, I don’t know what is.”
