Deborah O'Neill (NSW, Australian Labor Party) Share this | Hansard source

It's a privilege to rise once again in this chamber and draw my fellow senators' attention to the egregious conduct of the consulting, auditing and accounting firm PwC, who not only enabled the theft and monetisation of Australia's confidential information but have overseen an ongoing effort to evade responsibility and protect the image of their deeply complicit global brand.

On 2 August I chaired the final public hearing of the inquiry of the Parliamentary Joint Committee on Corporations and Financial Services into this sector, as part of our ethics and professional accountability inquiry. This committee will report quite soon, and it will engage with recommendations that will seek to address what we have seen as widespread malpractice within the consulting, audit and accounting sectors that goes to the very heart of what professionals should be able to guarantee in the marketplace.

I would like to give my thanks and gratitude to the Australian people who've been paying attention—the over 2,000 viewers of the live YouTube stream of what was happening here in the Senate, and the readers of the Australian Financial Review live blog and the daily blogs of the Australian Guardian and the ABC, which have been covering this hearing. I want to thank the people in Australia, and, indeed, across the world, who have shared in the disgust and anger generated by this grotesque reveal of the malpractice and failings of PwC. PwC is one of the companies, both nationally and globally, that purports to provide great guidance on governance; yet it has been revealed as failing grossly in its own management of itself. The Senate, with the fourth estate, has enlivened collective outrage.

The question to be answered is: why does this matter for Australians? Well, these partnership franchises, so fundamentally important to the proper functioning of our markets here in Australia, are of interest to every Australian who has superannuation. That's why what they do matters. They are required to act in a professional way, to make sure of the information they provide to the market about whether a company is a going concern and whether there's compliance with governance requirements, throughout all our ASX companies. They have their fingers in every single business in Australia, and they are making some very serious mistakes in terms of the quality of audit and in governance reporting.

What the closing hearing made clear was that PWC's global firm is complicit in this ethical ambivalence—the ethical ambivalence that enabled a tax-leaks scandal out of Australia to occur in the first place and created the culture in which that was enabled. Then what is clear to me is that there remains an ongoing and active strategy of protectionism, instead of accountability and reform, from PwC Global.

The morning of our session in the committee's final hearing began with the new, most recently appointed CEO, a man by the name of Mr Kevin Burrowes. He was implanted in, imposed on, the Australian operation by PwC Global. The committee has taken evidence from the Australian Kristin Stubbins, who was removed from her position—and she made it clear to the committee that she did not want that to happen—and from whistleblowers from inside and outside PwC. I have heard from a range of partners very concerned about the way in which PwC Global has manhandled its way into the Australian operation.

To cauterise their reputational damage, and the subsequent financial damage to the Australian firm, has been a part of the plan from PwC Global. It was a deliberate decision to place the interests of PwC Global operations above the transparency and accountability of, and reform within, their troubled Australian franchises. There was a steady stream of key international people coming to Australia and staying for extended periods. In this instance I particularly name Mr Bob Moritz, the global CEO of PwC. I also name a person who was very critical in this whole debacle, Global General Counsel Ms Diana Weiss, who was in residence in Australia and seems to me to have been critical in the cover-up that we saw from PwC and who continues to obfuscate and prevent the Australian Senate from getting documents that we know clearly reveal what was happening internationally with this information that came from Australia.

It was Mr Burrowes who came in to oversee the reporting that finalised their internal investigations, commencing with King & Wood Mallesons and then engaging Allens and Linklaters. Mr Burrowes was absolutely a part of the international team aware of these matters. Now, this inquiry ended up with a report, the Linklaters report that I've referred to. That is in the UK. The Senate has asked for it. We have asked our sister entity in the UK, the Financial Reporting Council, to see if they can get it. But we've had refusal, and continuing refusal, of any accountability from PwC Global. Recently, Mr Burrowes finally revealed, after further questions on notice, that, in addition to his A$2.4 million salary—on which he had to correct the record and tell us it was A$2.8 million—he receives $1.2 million from PwC international. He omitted that in evidence to this Senate. He omitted revealing that to his own partners in Australia. In July last year, he revealed that only to a very small group of people on the current governance board of PwC. That gives me pause for great concern.

Mr Burrowes, in his most recent appearance, defended the notion that his substantial payments from PwC International do not pose a conflict of interest with his role in PwC Australia as the CEO. Despite the firm's supposed separation into distinct entities across countries, the reality is, when the head of the firm has additional considerations beyond his joint and several liabilities to his Australian partners, the whole structure, which is already fragile, is further undermined. I have serious concerns about the state of PwC Australia, and I caution those seeking governance advice from that firm, because it clearly struggles to manage its own affairs and it seems to have a very, very limited understanding of what conflicts of interest actually look like.

What continues to trouble me very significantly is that Mr Kevin Burrowes, who receives over $1 million from the international firm, claims not to have access to the Linklaters report or knowledge of the international partners involved, yet he is contracted to PwC Global. There is clear worldwide complicity. Australian partners like Peter-John Collins have faced investigation and public scrutiny, which are still underway. International partners who were directly involved in commercialising confidential Australian government information continue to act with impunity, and the contempt that PwC Global shows for the Australian sovereign jurisdiction is not lost on me or other senators on that committee.

In that hearing, we heard from Meredith Beattie and also from Ziggy Switkowski, who revealed important details about governance failures. We also heard from former CEOs Luke Sayers and Tom Seymour, and I will have more to say about that. But I want to really stress the point that, despite our extensive efforts, PwC Global continues to stand in the way of the Australian people and, indeed, the Australian arm of its own entity, PwC Australia, achieving full visibility of exactly what transpired within their global firm both during the tax leak scandal itself and in the aftermath.

We know, from the 144 pages of internal PwC emails that were released to the Senate in response to my questions on notice, that PwC staff from the United States, the Republic of Ireland, Hong Kong and London, as well as numerous staff within Australia, received and planned to utilise confidential Australian government information. PwC Global is not off the hook. They have intentionally shielded these individuals from accountability and, as far as we know, are still enabling them to operate in jurisdictions around the world as purportedly 'trusted actors' under the PwC International brand.

PwC Global have demonstrably prioritised their own interests over the need to reform the culture and ethics of the Australian firm and, indeed, their global entity. They've put the security of companies and governments across the world at risk by refusing to release the Linklaters report. They continue to refuse to provide any assurance that international actors who engaged in misuse of Australian confidential information are not still engaging in the same behaviour. We must condemn the action of PwC Global. It is no longer a separate entity from Australia, not with Mr Burrowes receiving funds from both the Australian and international entities.