SMH: Fear and greed: The consulting sector faces a reckoning

The big four have been put under the spotlight following the PwC tax scandal...

It started with a simple announcement from the Tax Practitioners Board in late 2022. Former PwC partner Peter Collins’ tax licence had been suspended because of alleged integrity breaches.

But rather than being consigned to being another footnote in the Byzantine world of taxation, the TPB’s announcement has ended up creating a whirlwind that’s almost certain to unravel not just PwC but the entire professional services sector.

As the full extent of Collins’ alleged misdeed – attempting to leverage confidential government tax plans to drum up business with corporate clients keen to cut their tax commitments – came to light, a subsequent Senate committee inquiry has sent one of the country’s most powerful and secretive sectors into crisis mode.

The likes of PwC had built their aura of credibility from the financial scrutiny of our largest corporations, as well as government departments such as the tax office and federal police. But PwC and its peers had been accountable only to themselves and had been spared the kind of external oversight and scrutiny they deliver to others.

Greens NSW MP Abigail Boyd, who is conducting an inquiry into the state’s use of consultants, has also noted the poaching of civil servants and the parachuting in of former consultants into senior roles.

“What do you get from working in government? A lot of what you get is the contacts and the information. Where is that most useful? In an organisation that trades on contacts and information. And that’s what these consulting firms are,” she says.

Boyd says it has reached a stage where there is a culture permeating of “let’s use consultants wherever possible”.

The government has already announced plans to rein in the billions its departments are spending on consultants. The spending has helped the Australian consulting industry become one of the biggest in the world and it is completely disproportionate to the modest size of our economy.

How did we get here?

Read more in the full article on the Sydney Morning Herald's website.

 

Source: Kruger, C., The Sydney Morning Herald, "Fear and greed: The consulting sector faces a reckoning", published 12 August 2023, https://www.smh.com.au/business/the-economy/fear-and-greed-the-consulting-sector-faces-a-reckoning-20230811-p5dvwa.html

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