PwC advice scandal points to corporate culture issues
Consulting firm PwC is unlikely to be receiving new government contracts any time soon, as the public service cracks down on unethical behaviour from third parties.
The professional services house, which is in hot water for leaking confidential Commonwealth information, has effectively been banned from future work after the finance department ordered officials to consider a company's history of confidentiality breaches before awarding a bid.
Helen Bird, a corporate governance fellow at Swinburne Law School, says while it would be difficult for the government to cancel any current contracts with PwC, it will likely look to shift work to its rivals or in-house.
"It's worth sending a message because you don't want any other accounting firm thinking they can get away with this," she told AAP.
The Albanese government has made it a priority to reduce expenditure on external consultants after costs blew out under the coalition.
But Ms Bird says it's easier said than done.
The "big four" consulting firms are effectively an oligopoly, meaning their services are essentially "forced upon" governments.
Decades of staff cuts have drained the public service of expertise, making it even more reliant on external contractors.
"As a consequence, they do tend to get that work and they keep it because it is harder," Ms Bird said.
Because governments are reliant on firms like PwC for advisory as well as standard auditing and accounting services, the potential for conflicts of interest to arise are "massive", she warns.
In effect, the fox has been charged with guarding the henhouse.
Despite numerous reviews into corporate governance in Australia, including the banking royal commission and inquiries into Star and Crown casinos, failings of corporate culture remain as companies put profits above responsibility.
"We haven't seen a significant shift in sentiment and ethics," Ms Bird said.
"The story just continues, it doesn't seem to change. The underlying conduct is, at times, still very ordinary."
Opposition finance spokeswoman Jane Hume has stopped short of calling for a ban on future PwC contracts, but supported the government's move to ensure there are higher expectations of third-party providers.
"Ethical behaviour that meets community standards should be a baseline expectation," she told Sky News.
Ms Bird says PwC may not have seen the last of the consequences for its breach of trust.
"These firms depend upon reputation," she said.
PwC relies on its partners and employees to be registered with appropriate entities, such as the Tax Practitioners Board and the Institute of Chartered Accountants, to be able to practise.
"So what I think is really critical here is that all those bodies that registered them need to conduct their own inquiries and say 'why should we allow you to continue to be members, given what you've just done?'"