As the PwC scandal continues, new research shows significant public concern about the relationship between the consulting industry and government, with an overwhelming majority of Australians (80%) supporting a ban on government contracts for companies that leak information and breach public trust; greater parliamentary scrutiny of the industry; and reduced outsourcing for core public sector work.

The public support greater parliamentary scrutiny of the industry, reduced outsourcing for core public sector work and a cooling off period for individuals working between government and consulting firms. 85% of Australians agree that consultants should be required to answer questions about government contracts when called before parliamentary and other inquiries. Most respondents think the Government is currently spending too much on consultants.

Key Points:

• 4/5 Australians (80%) agree that consulting firms that leak confidential government information should be banned from consulting for the government (10% disagree)
• 85% agree that consultants should be required to answer questions about work commissioned by the government when called upon in parliamentary and other inquiries (6% disagree)
• 4/5 Australians (79%) agree that the public service should have the skills and capacity to do work currently outsourced to consultants
• 3/4 Australians (72%) think the $1 billion spent by the Federal Government on external consultancies last year was too much and most (64%) think it would be better spent on hiring and training in-house public servants
• 60% support a cooling off period between working for government and working for a consulting firm with government contracts, 7% opposed, 32% don’t know

“The Australian public are clearly concerned about what has come to light at PwC. Australians support a ban on consulting firms that leak information and breach public trust, and that’s something the Parliament should consider,” said Bill Browne, Democracy & Accountability Program Director at the Australia Institute.

“Big consulting firms receive billions in public money but are largely exempt from public scrutiny. That needs to change.

“At their worst, consulting firms have leaked confidential government information to drum up business and potentially help their multinational clients avoid paying millions of dollars in tax.

“A requirement that all consultants’ reports and advice for governments are made public would let people make up their own minds about the quality and integrity of that advice.

“Consulting firms charge through the roof for advice that is often simplistic, flawed or self-interested – or has been specifically commissioned to further the government’s preconceived agenda. Consultants seem to have no moral qualms about taking public money to deliver advice that is against the public interest.

“PwC has abused the public’s trust by leaking government tax plans, and a proportionate response would be a ban on PwC receiving government contracts or confidential information until it has earned back that trust.

“There have to be consequences for the flagrant waste of money and abuse of trust that consulting firms have been the heart at. Cuts to spending on consultancies and guidelines for when they should be used are one pillar; sanctions for consultancies that have ripped off or mislead the public must be the other.”

Recommendations from the Australia Institute submission to the consultancy inquiry:

• PwC should be banned from receiving government contracts or confidential government information.
• The abolition of public service staffing caps.
• New guidelines on the use of consultants, a revolving door policy for public servants and capacity building included in consultancy contracts.
• The Senate should issue a standing order for the production of consultants reports.