The Trouble with Big Consultant
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PricewaterhouseCoopers (PwC) has finally released the names of the 67 partners and employees who were privy to the confidential government information leaked by their former international tax expert, Peter-John Collins. The fact that they only did this after sustained public outcry is just another example of how they, and other big consulting firms receiving government contracts, act for their own self-interest and profit – not the public good.
From the shedding of 10% of the public service at the end of the 1980s to the staffing caps imposed by the Coalition government in 2015, the last forty years have seen a sustained hollowing out of our machinery of government. Whilst the rationale for this included cost cutting and efficiency, the effect has been to transfer the equivalent of 53,900 full time staff and $20.8 billion dollars to contractors, including PwC, in the last financial year. Government spending on consultants compared to our population is the highest in the world. But don’t worry, this money didn’t go to waste: the Big Four – EY, Deloitte, PwC and KPMG – donated $850,000 – 0.004% of their earnings – back to the major parties.
The outsourcing of our government business has disempowered and de-skilled our public service.
Due to continued government efforts to reduce the public service, its daily operations have come to rely on consultants, the “shadow public service”, not just for their knowledge on specialist areas but even their critical infrastructure, such as payroll. This reliance is such that the Australian Tax Office is still contracting with PwC for everything from strategy to, ironically, auditing, even though they’ve suspected them of leaking confidential information for years. PwC even continued to receive new government contracts after the scandal was made public.
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The revelations that Collins leaked government secrets to help fourteen big overseas companies dodge tax – which earned the firm a cool $2.5 million and Collins Corporate Tax Adviser of the year – were scandalous, but not unexpected. It’s common in large consulting firms to both advise the government on how to design a piece of law or policy, and advise corporate clients on how to tender for, comply with or get around that very same thing. This leaves scope for conflicts of interest across consultancy firms who operate under secretive business arrangements.
Information barriers, confidentiality agreements and conflict of interest declarations are only as good as the thin walls they sit behind, and the company culture and people holding them up. These walls begin to crumble inside firms, when the advice big consultants give to the government adversely affects their clients. Of the 67 partners and employees at PwC who did – or, arguably, should have known – that confidential information was being allegedly being leaked by Collins, who did anything about it? Is an internal investigation, putting a few bad eggs on paid leave and training staff about conflicts of interest going to be enough?
The issues with government outsourcing comes down to a fundamental misalignment of values between consultancies and the carrying out of public work. PwC says that their purpose “is to build trust in society and solve important problems”. But this recent scandal has shown that their first goal is towards profit, with complying with the law, furthering the public good and building trust all coming second.
We’ve seen this misalignment of values time and time again when government business has been outsourced and privatised. A stark example of this is the effects on privatised aged care homes. Nursing staff paid low rates, working unpaid overtime and given six minutes a day to wash and toilet the people they’re meant to be looking after. The exacerbation of these problems during COVID-19, when those in the homes were put at greater risk by staff shortfalls and practices like locking them in their rooms. There are some things, like care, that cannot and should not be driven by profit and efficiency.
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There’s been a lot of discussion in the Senate inquiry, media and civil society about how we can reign in the consultancies. Tightened contracts, legally enforceable guidelines for consultants, requirements around revolving doors, publishing of their reports, criminal proceedings and ceasing to work with companies who breach trust are all good suggestions. But most important is truly utilising the resource we already have, who are legally required to act in the public interest – the public service.
The Public Service Act 1999, mandates that public servants must be trustworthy, professional, objective, innovative, efficient and must “achieve the best results for the Australian community.” They’re accountable through the Australian Public Service Code of Conduct, and sanctions that result from its breach. They’re subject to the Ombudsman, Administrative Appeals Tribunal, Freedom of Information requests, inquiries, Budget Estimates questions, audits and through the government, to the people, through Question Time. They’ll soon be subject to the National Anti-Corruption Commission.
If we’re to put more faith in the public service, we need to reform its culture in adherence with these laws and accountability mechanisms – it's not like what we had in place stopped Robodebt or sports rorts when the government of the day didn’t listen, or didn’t provide the opportunity to provide frank and fearless advice. The Independent Review of the Australian Public Service should go a way towards achieving this, through developing the purpose and values of the public service in consultation with staff, and putting the structural reform in place to achieve them. But this alone won’t go far enough – the public need to be consulted on what they want our public service to be.
Revitalising this public institution could include redistributing the billions that we give to the private sector back to public servants.
Investing in their upskilling and empowerment to provide frank and fearless advice and respond to the government of the day. Letting them work together and by their values. Giving them the trust and opportunity to design and deliver quality services, in partnership with the community, instead of against it. Because unlike consultants, when given the proper resources, training and trust, the public service exists to serve the public good.
RACHEL HAY
Rachel Hay is a researcher, writer and campaigner, working for a world where our people and environment are protected, empowered and celebrated. She leads our project on centring the public good of care before, during and after disaster.
