Consulting firms who leak confidential information and breach public trust should be barred from winning Government contracts, according to a submission to the Parliamentary Inquiry into the integrity of consulting services.

Appearing today at the Senate Inquiry into consulting services, experts from the Australia Institute’s Democracy & Accountability program will warn that the over-use of consultancies by Government has corroded Australian democracy, hollowed out the public service and led to bad Government decisions.

The recommendation to bar consulting firms who breach public trust follows a recent high-profile scandal regarding leaked government tax plans by PwC.

Key Points from Submission:

• When consultants are contracted to do work that public servants could do, it stops the public service from developing skills and knowledge in-house.
  • If the public service lacks the skills and knowledge to do something, it would also lack the skills and knowledge to write an effective tender for those services.
  • Consultants are expensive, routinely charging the taxpayer more for junior staff than Australia pays its prime minister.
  • Australia spends a billion dollars or more a year on consultancies, money which could hire thousands of public servants.
• Consultants lead governments to make bad decisions.
  • Consulting firms often produce flawed analysis, which is cited uncritically by politicians.
  • Sometimes, consultants are hired to tell the government what it wants to hear. This taints the public debate and is a misuse of public money.
  • Consulting firms also bury reports that are unfavourable to the government, including evidence of government illegality.
  • The interests of consultants are not the public interest, which leads to flawed and self-interested advice and, at worst, outright abuse of trust.
• Recommendations Include:
  • 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.

“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,” said Bill Browne, Democracy & Accountability Program Director at the Australia Institute.

“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.

“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.

“At the Robodebt Royal Commission, PwC described how they buried a report critical of government policy – despite it being part of work they were paid almost a million dollars for.

“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.”

Senate Finance and Public Administration References Committee
Management and assurance of integrity by consulting services

Senate Committee Room 2S1 – Parliament House
The Australia Institute to appear 2.50pm Tuesday 2nd May