The Victorian Government has revealed for the first time that it is considering penalties for consultants who engage in dodgy behaviour, after questioning from Greens MP Ellen Sandell in PAEC.
In response to questioning by Ms Sandell at Public Accounts and Estimates Committee (PAEC) hearings this week, the Department of Government Services said they would be “strengthening the [supplier] code of conduct” and “looking at potential penalties” to enable them to act more quickly when PwC-type behaviour arises.
This is the first indication that the Government is considering penalties and stronger rules about consultants, after it was caught flat-footed by the PwC scandal at a Federal level.
Data released by the Victorian Auditor-General’s Office (VAGO) revealed the Labor Government had spent $671 million dollars on consultants over the past five years, including almost $80 million dollars on PwC.
But the hearings today revealed that the scandal plagued firm was also selected to undertake an internal audit of the department responsible for managing Victorian Government integrity standards, DPC, in 2022.
PwC was also given $1.3 million for advice on regulatory reform and over $200,000 for tax reform advice, both of which would have been likely to benefit other clients of PwC. Despite this, the Victorian Labor Government had only sought verbal ‘assurances’ that PwC hasn’t misused this information.
Deputy Leader of the Victorian Greens, Ellen Sandell, said stronger consulting rules couldn’t come soon enough, given the Victorian Government was giving millions of taxpayer dollars to private consulting firms while cutting public sector jobs.
She added that recent contracts between the Labor Government and PwC – including one for advice on tax reform, and another for advice on a ‘cutting red tape’ for business program – posed a significant risk for conflicts of interest, given PwC would likely also be advising those impacted by both the tax reform and the business program.
A Parliamentary Budget Office (PBO) costing obtained by the Greens found halving expenditure on private consultants would save the state $1.5 billion dollars over the next ten years.
As stated by Deputy Leader of the Victorian Greens, Ellen Sandell MP:
“Labor in Victoria continues to give millions of dollars to PwC for advice on tax reform and business regulation reform, both of which are likely to benefit other PwC business clients. “There are fundamental conflicts of interest here that Labor has failed to address, and I’m pleased that they’ve finally been pushed into considering penalties and stronger rules.
“The Victorian Labor Government’s unwillingness to move quickly on strengthening rules around consultants like PwC raises serious concerns about their commitment to improving Victoria’s integrity standards.
“It’s pretty disappointing that the Labor Government is cutting hundreds of public sector jobs, who provide frank and fearless advice to the government, while spending hundreds of millions of dollars on unregulated corporate consultants to tell it what it wants to hear. This needs to change.”