PwC tax scandal shows why broad anti-corruption body needed: Home Affairs boss

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One of the nation’s most powerful public servants says the PwC tax leak scandal shows why the new National Anti-Corruption Commission is badly needed, as the Department of Home Affairs closely scrutinises its relationship with the troubled consulting giant.

Home Affairs Secretary Mike Pezzullo declared he was “not confident” in PwC following revelations of its breach of confidential tax information and he was “taking a very close view of any new contracting that we do” with the firm.

Secretary of the Department of Home Affairs Mike Pezzullo.Credit: Alex Ellinghausen

“As far as I’m concerned, the advent of the NACC could not have come too soon,” Pezzullo told a Senate estimates hearing on Monday.

“We have to throw the anti-corruption [and] integrity net much more widely to get into the full supply chain of people who deal with the Commonwealth … This is a salutary example, albeit from some years ago, as to why you need that broader anti-corruption framework.”

The Home Affairs Department also revealed that Australian Border Force had followed the Department of Defence by suspending the use of a fleet of Chinese-made drones following security concerns.

It was revealed earlier this year Border Force had purchased 41 drones made by Chinese company Da Jiang Innovations, a company banned by the Pentagon last year because of concerns about the firm’s military links and cybersecurity vulnerabilities.

The Department of Finance revealed earlier this year that surveillance cameras and intercom systems made by Chinese companies Hikvision and Dahua were being ripped out from the neighbourhood offices of almost 100 federal politicians over security concerns.

PwC’s sprawling array of federal government contracts will come under intense scrutiny at Senate estimates hearings this week after revelations the firm’s former head of international tax shared confidential government briefings on multinational tax reform with PwC partners and clients to help them sidestep the laws.

The Sydney Morning Herald and The Age revealed on Monday that PwC has $453 million worth of current contracts with the federal government, with the Department of Defence making up almost half the total.

Greens senator Barbara Pocock said the PwC scandal should be at the top of the NACC’s agenda when it begins work in July, but legal experts say it is not yet clear whether the conduct would be considered within the organisation’s remit.

“I think it is a systemic problem we need to pursue and really chase down the kinds of conflicts that are very evidently acted on and it’s … squarely in the remit of the NACC,” Pocock said.

Officials said Home Affairs had six active contacts with PwC worth $8.13 million, of which $7.8 million had already been spent.

Pezzullo said there was no legal basis to ban PwC from working with the department and he had to take the company at its word when it says it has reformed its processes.

Treasurer Jim Chalmers said the government was planning a “crackdown” on the leaking of confidential government information by consultancies, saying the PwC experience had been “deeply, deeply troubling”.

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