Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the PwC tax leaks scandal and what this means for corporate Australia, what this means for the private sector and what the Albanese Labor government is doing to address the malfeasance wherever it may hide. The PwC tax leaks matter was first revealed by the Australian Financial Review. As we now know it involved former PwC tax partner Peter Collins who was sharing confidential government information that was used to advise clients on how to circumvent new multinational anti-avoidance laws. We all know of this because of the great work of my Senate colleague Senator Deb O'Neill who originally uncovered the systemic nature of this matter. Her work on the Senate Economics Committee has accomplished so much in terms of what they are doing to hold very powerful companies and very powerful people to account. Without her it is very possible that this deliberate fraud on the Australian people would never have come to light so that it can be addressed. I know there are other senators in this place that have since been involved in scrutinising and trying to get to the bottom of this outrageous attack and undermining of the Australian taxpayer.

As governments are held to account, the private sector and companies need to be held to account equally. If a company leaks confidential government information to benefit its own financial and other interests, as happened in this case, it does need to be held accountable. Cover-ups, wherever they occur, must be uncovered, and if it takes whistleblowers and this parliament to do so then so be it. When companies are not upfront and honest with their customers, and in this case the Australian people and the Australian government, then we must ensure we shine a light on it. Peter Collins and any others who have shared confidential government briefings about tax policy with partners and clients must be held accountable in parliament and within the Australian legal system. The Albanese Labor government, as it should, is turning up to work every day and will never run scared from companies or the private sector when they're engaged in allegedly illegal behaviour, unlike the Liberals who contracted out public servants' work to these greedy interests. We all have a duty in this place and the other place to call it out and to shed light on what is happening within these very powerful companies which work for government through contractual obligations.

Seeing the 144 pages of emails and hearing about the consequent behaviour that followed at PwC has been horrendous because they display the unethical nature of behaviour inside this organisation over many years and that employees of the company have been calculating in the way they have conducted themselves. This behaviour is a breach of trust of the highest order, and it is unethical. This scandal has exposed several shortcomings in our regulatory frameworks that were largely ignored by the coalition for nine very long years, wherein the Australian Taxation Office was shamefully shot down after flagging this behaviour. Those opposite when in government were made aware of these shonky manoeuvrings that were going on, but they won't happen on our watch—not our watch. As a government we are taking significant steps to clean up the mess.

The Albanese Labor government will oversee the biggest crackdown on tax advisers' misconduct in Australian history. We are cracking down on misconduct to rebuild people's faith in the system and the structures that keep our tax system and capital markets strong. We're also cracking down on the scourge of multinational tax avoidance and making sure that multinationals pay their fair share of tax in Australia. The package of reforms announced by the government include strengthening the integrity of the tax system, increasing the powers of our regulators and strengthening regulatory arrangements to ensure they are fit for purpose. Australians have a right to expect that these companies that provide services for the government are held to the highest standard of trust and integrity and do not engage in unethical and illegal activities.

Since coming to government, it's become very clear to us just how entrenched the use of consultants and external labour had become within the Public Service under the previous Liberal government. We know they ran the Public Service down and were just handing out contracts willy-nilly. So legislation to strengthen the integrity of our tax system and increase the powers of regulators will be introduced this year, with consultation on the reform beginning very soon.

The strong and substantial action that the Albanese Labor government is taking builds on the work already underway to improve government processes in the wake of the PwC tax leaks scandal, including new legislation to strengthen the Tax Practitioners Board introduced to parliament earlier this year, a $30 million funding boost for the Tax Practitioners Board to increase compliance activities in the October 2022-23 budget, and action to strengthen Commonwealth procurement frameworks by directed PwC to remove any staff involved with the confidentiality breach from contract work until the outcomes of the Switkowski review are known and by enabling departments to terminate contracts with parties that receive adverse findings against them from a legal body.

The Australian Federal Police commenced a criminal investigation into PwC over the tax leaks scandal following a referral from Treasury. In addition, inquiries are currently being undertaken by the Parliamentary Joint Committee on Corporations and Financial Services and the Senate Finance and Public Administration References Committee into the issues relating to the PwC matter. This is a clear demonstration of the great work that is done by Senate committees in this place.

But it won't just stop there. As a government, we're committed to significant action. We must improve the integrity of the tax system so multinationals and others who advise their clients to avoid Australian tax laws must be penalised. The current tax promoter penalty laws have remained largely untouched since their creation in the 2000s and have only been applied six times. Bigger penalties will reduce incentives to use confidential government information to help clients avoid tax. The general taxpayer out there cannot avoid tax. They're scrutinised by the tax office religiously. So too must these multinational companies be. We will also increase maximum penalties for advisers and firms who promote tax exploitation schemes from $7.8 million to over $780 million. We will expand tax promoter penalty laws so they're easier for the ATO to apply to advisers and firms who promote tax avoidance and increase the time limit for the ATO to bring Federal Court proceedings on promoter penalties from four years to six years after their conduct occurred.

We must also provide more power to regulators which is why we will remove limitations in the tax secrecy laws that were a barrier to regulators acting in response to the PwC's breach of confidence; enable the ATO and Tax Practitioners Board to refer ethical misconduct by advisers to professional associations for disciplinary action; protect whistleblowers when they provide the Tax Practitioners Board with evidence of tax agent misconduct; give the Tax Practitioners Board more time, up to 24 months, to complete complex investigations; and, improve the Tax Practitioners Board's public register of practitioners so that people have more transparency over agent and misconduct.

The PwC scandal has shown us that the regulations are not up to scratch. It has shown us that the private sector is ahead of government and law enforcement in being able to evade and stop scrutiny. This is mainly for large consulting, accounting and auditing firms. How this misconduct was able to occur and go undetected without consequence for so long is of major concern, particularly in light of the fact that the former government were advised. So this review will look at whether there are appropriate governance obligations on these firms in areas such as transparency, executive responsibility, management of conflicting interests and dealing with misconduct, Treasury will also coordinate a range of government responses to the PwC matter and the systemic issues being raised. The message must be relayed that if your company has engaged in this type of activity then you will be caught.

The Albanese Labor government is focused on ensuring that the national laws are up to scratch and we will hold wrongdoers to account. That is our fundamental responsibility. The other issue is stop employing so many consultants. When the Liberals were in government they ran down the Public Service. We have a good Public Service. We need to continue to build the Public Service, build the skills so we spend less money on consultancies going forward.