Consultants report calls for new guardrails around multimillion-dollar consultancy contracts

The Finance and Public Administration's final report into the management and integrity of consulting firms was published on Wednesday, 14 months after the PricewaterhouseCoopers Australia (PwC) tax leak scandal set off the inquiry.

The committee renewed its call for PwC to name the partners and staff involved in the alleged breach of confidential government information, alongside 11 other recommendations targeting broader reforms in the Australian Public Service.

Key committee members, including chair and Liberal senator Richard Colbeck, Labor senator Deborah O'Neill and Greens senator Barbara Pocock urged the Albanese government to establish a new Joint Parliamentary Committee to approve consultancy and services contracts.

The senators recommended the committee be modelled on Parliament's Public Works Committee, which scrutinises Commonwealth projects valued at more than $15 million before they can go ahead.

The report found the Public Works Committee considered projects to the value of $3.7 billion in 2023, while the government spent more than $3 billion on consultancies and services in the same period.

Senators also called out AusTender, the government's transparency portal for contracts, for lacking detailed, consistent and meaningful descriptions.

It is the second committee to do so within a year, and urged improvements to the site, while recommending interim measures which would see the Finance Minister table all APS consultancy contracts worth more than $2 million twice a year in Parliament.

Parliament referred the inquiry to the committee in March 2023, following allegations that a PwC Australia former head of international tax shared confidential information from a Treasury briefing with other staff and partners.

In two blistering reports into the firm's tax leak scandal senators united to rebuke PwC for what they called a "calculated breach of trust", and "problematic" engagement with Parliament.

But the cross-party stance faltered on Wednesday, when the Greens issued a 44-page dissenting report, inclusive of 22 of their own recommendations

Senator Pocock said despite the "cross-party outrage," her party held "different views on the necessity, scope and urgency of a response to what we term 'a very public swindle'".

This included calls for consultants to be banned from making political donations within 12 months of their engagement with the government, after big four consulting firms donated $938,152 to Labor and the Coalition in 2022-23, increasing on their donations the prior year.

The Greens' spokesperson on the public service also recommended a "revolving door" between the public service and private sector be better managed.

"We must also end attempts at political and economic influence through the use of the revolving door," Senator Pocock wrote.

This would involve enforcing a one year cooling-off period for partners involved in government contracts entering the APS, with the reverse to apply to senior public servants and senior ministerial staffers.

The dissenting report caused tension with Senator O'Neill, who said the Greens MP had not presented her recommendations to the committee.

"It is a shame that these additions were not brought to the committee in the same non-partisan spirit that has defined the inquiry, and did not have capacity to be bolstered by potential cross-party deliberation, consultation or support," she said.

But she and Labor senator Louise Pratt also took aim at the Coalition in their additional comments, highlighting the government's increased reliance on consultants under previous Coalition governments.

The senators blasted the Abbott government's Average Staffing Level cap, which tied the size of the bureaucracy to 2006-07 levels of 167,596.

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This caused agencies to rely more on outsourced labour, with an audit of employment finding the 2021-22 public service included nearly 54,000 contractor, consultant and labour hire roles.

"The conditions for consultant infiltration of the Australian Public Service (APS) did not occur spontaneously, as the Abbott, Turnbull and Morrison Coalition Governments instituted policies that directly undermined the APS, and by extension, the integrity and security of our government departments and information," the Labor senators wrote.

The senators said the Albanese government had demonstrated "a renewed faith in the public service" since the 2022 election, with the public service growing by tens of thousands of places, and agency heads directed to slash their outsourced labour.

The Labor MPs endorsed the 12 recommendations made by the committee, saying they would - if implemented - "continue to meaningfully improve the procurement practices of the government, and provide additional assurance that taxpayers money is being spent in ways that are truly of benefit to the Australian people".