Nick McKim (Tasmania, Australian Greens) Share this | Hansard source

There are two components of the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023 I want to address. The first is schedule 2, which will give the Australian Accounting Standards Board power to create sustainability standards, and the second is schedule 3, which will implement selected recommendations from the government's review into the Tax Practitioners Board.

Schedule 2, which is effectively the introduction of climate risk reporting, has the capacity to represent a significant step towards driving a change in corporate culture in Australia. Directors and executives of companies will have to turn their minds to how their businesses are changing to respond to a carbon constrained economy. This is about the old business management saying 'if you are not measuring it, you can't improve it'. These changes will start to quantify a company's exposure and therefore, in the case of publicly listed companies, investors' exposure to both climate transition risks, such as being stuck with stranded assets like coal or oil or gas, and physical assets, which are caused, for example, from turbocharged disasters like floods and fires on company assets and things like skyrocketing insurance premiums on company cash flows.

A climate risk framework will focus the minds of companies who are trying to reduce their exposure to coal, oil and gas, and, likewise, it will focus the attention of investors, particularly big investors like super funds, to ensure that they know what they are buying into. And that is critical for them, because a well-informed decision, a decision based on a broader suite of information, is more likely to be a good decision. But, critically, a climate based financial framework will expose companies like Woodside, Santos and Whitehaven for the fact that they actually have no plans to diversify out of coal and gas. Make no mistake: companies like Woodside, Santos and Whitehaven are pure planet cookers. They will be forced to abandon their current market deception that they are on their way to net zero. Let's be really clear about this: if you are a coal or a gas company, you cannot actually be on your way to net zero. That is a nonsensical proposition, and investors and everyone else in this country have a right to have that deception exposed and have a right to understand the truth of the situation, which is that fossil fuel companies like Woodside, like Santos, like Whitehaven are deceiving the market at the moment by claiming they're on their way to net zero. A robust climate risk reporting framework will expose that deception.

The people that are running these companies are driven by greed and the profit motive, driven to engage in activities that they know are massively contributing to global heating, that they know are going to massively contribute to the collapse of the ecological systems that ultimately underpin life on this planet, that they know will result in the likely displacement of billions of people from their homes this century and that they know will massively compromise the opportunities of our children, our grandchildren, their children, their grandchildren to live a good and dignified life. That's what those companies are doing, and at the same time that they're doing that they are deceiving the market and pretending they're on their way to net zero. They are not on their way to net zero, and a properly constructed climate risk reporting framework will expose that deception.

Without a standard definition of 'climate disclosures' being in place so that investors and activists can hold companies to account, corporate disclosure will remain too generalised, too ad hoc, too removed from financial performance indicators and too prone to greenwashing. That is what we are seeing from a range of big companies at the moment: a concerted effort to greenwash, a concerted effort to deceive the market, a concerted effort to deceive investors and a concerted effort to deceive government, through their greenwashing spin. And it needs to end. So we welcome what we believe is a first step on the way to a genuine climate risk disclosure framework in this country.

On schedule 3, earlier this year the Australian people found out that PricewaterhouseCoopers partner Peter Collins shared secret government information with PricewaterhouseCoopers partners to advise PricewaterhouseCoopers clients on how to structure to get around upcoming laws designed to crack down on tax avoidance. PwC made millions of dollars from this. The companies that restructured could have cost the public purse in Australia up to $180 million in forgone tax revenue each year. I well remember when this scandal broke and how horrified many people in this building and, critically, many people out in the community were. The ins and outs of how big consulting works in this country had never—or very rarely—been the subject of discussions in pubs, at barbecues or over the back fence, but suddenly millions of people in Australia were talking about it.

And I well remember asking questions in Senate estimates of departments like the home affairs department. When I asked the then secretary of the department, Mr Pezzullo, what action his department had taken to tighten its frameworks around the risk that not just PwC but other big-four consulting companies—Deloitte, KPMG, EY—were actually monetising confidential information in the way that Mr Collins did for PricewaterhouseCoopers, his answer was: 'Well, I've rung up the CEO of PricewaterhouseCoopers and I've been assured that it's all fine.' I couldn't believe it. Well, of course PricewaterhouseCoopers are telling him it's all fine! What else would they say?

I want to thank and congratulate my friend and colleague Senator Barbara Pocock for the role she has played, for her dogged pursuit of this issue, of Mr Collins and of a range of other issues that have been exposed. And I thank Senator Scarr for the support he's just indicated for that statement. Senator Pocock has been relentless in her pursuit of this and I believe has done the hard yards with the utmost integrity in exposing this and done a massive solid not just for the Australian taxpayers but for all Australians who want to have confidence that government processes are respected and that big corporations are not getting away with metaphorical murder. So I want to place on the record the magnificent job Senator Barbara Pocock has done over many months to chase this matter down and get us here today, through her negotiations with Minister Jones, to a situation where Greens amendments will be accepted and will pass through this place—that we'll actually start to chase the fox out of the henhouse and ensure that the Tax Practitioners Board remains free of the worst kind of influence and the worst kind of effect that big-four consulting firms had on it.

While I have the opportunity, I also want to make a few observations about the business model of big consulting firms. Make no mistake, the business model of big consulting is based on things like conflicts of interest. We've all heard it time after time from the big four consulting firms that they have in place these internal firewalls which mean the work they're doing for the government over here is separated completely from the advice they're providing to clients over there. Don't believe a word of it, because these supposed firewalls are absolutely porous. They are like the old foamies we used to ride in the six-inch-high waves on Blackmans Bay beach when I was growing up. You kept them in the water for an hour and they'd be totally waterlogged and they'd sink underneath you. These firewalls are absolutely porous. The big four consulting firms have made massive bank over the decades by taking confidential information provided to them by government, monetising it and passing it on to their clients.

The issue with PricewaterhouseCoopers is they got busted. They got caught. There's a reason why you've heard nothing out of the other three of the big consulting firms—Deloitte, KPMG and EY—over the last six to nine months. They have been in the middle of the biggest bush they could find, rigid with the most minor tremors of fear, hoping that nobody actually remembers that they exist. They know that's part of the business model of big consulting, and they didn't want to be dragged through the mud like PricewaterhouseCoopers was dragged. This is the sharp end of neoliberalism. The public sector has been hollowed out to the extent that it can't actually provide advice that governments need, and the only way they can get that advice, particularly on complex issues, is by going to the consultancy firms. Senator Scarr's going to come in and defend big consulting. This will be good!