Conflicted Consultants Need Professional Standards, Parliamentary Scrutiny


The Australia Institute will attend a Senate inquiry today to discuss the conflict of interest risks associated with consultants, the need for better oversight and the case for professional standards in the consulting sector.

The Australia Institute’s Rod Campbell, Research Director, and Bill Browne, Democracy & Accountability Program Director, will appear before the Senate inquiry into structural challenges in the audit, assurance and consultancy industry at 3:30pm Friday 6 October.

The submission recommends clear standards, better monitoring and strong sanctions.

Types of conflicts of interest:

  • Giving advice to government that favours private clients over the public interest
  • Distorting advice so that it is favourable for the relevant minister or senior public servants rather than advising what is in the public interest, or even dropping reports that would be unfavourable for government ministers
  • Acting for different arms of government on the same topic
  • Making political donations that may influence government tendering

Recommendations to manage problems with consultants:

  • Banning political contributions from government contractors
  • Implementing a clear and strict revolving door policy for public servants
  • Considering banning auditors from doing other work for their clients
  • Professional standards for economic consultants
  • Monitoring by the Senate of the work consultants do for government
  • Banning consultants from receiving further government work if they engage in misconduct

“Consultants have shown they are prepared to compromise their advice and tell government ministers and public servants what they want to hear, rather than what is in the public interest,” says Bill Browne, Director of the Australia Institute’s Democracy & Accountability Program.

“Similarly, there is a risk auditors could compromise audit quality to keep on good terms with company management, rather than work in the interest of the company and its shareholders.

“The Australian Government is one of the biggest and most powerful clients, so the fact that consulting firms are willing to breach the trust placed in them by the Australian Government, cut corners on its contracts and treat it as a cash cow is a worrying hint at how they treat their smaller and less powerful clients.

“Australia Institute polling research finds that four in five Australians agree that consultants who leak confidential information should be banned from doing further government work.”

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