In a move viewed as being an effective Commonwealth ban,the federal Finance Department in May issued aprocurement note to “remind” government agencies tendering for consultants that they must consider a potential supplier’s history including “unethical behaviour”. The Australian Federal Police is nowinvestigating the PwC leak.

Queensland has paused new contracts with PwC,and the NSW government is considering newmultimillion-dollar fines for consultancies that leak sensitive information.

But in Victoria,Premier Daniel Andrews has repeatedly responded to the scandal by saying his government sought assurances from the firm and was confident there had been no leak of Victorian information.

He told the public accounts and estimates committee this month that his government would not act in a “unilateral fashion” and preferred a nationally consistent approach. “Now if they,if the Commonwealth take what we deemed to be too long to resolve these matters,we may revisit it[a Victorian response],” he told the committee.

On Saturday,responding to questions from this mastheadabout contracts signed his year,the government said it would look at introducing penalties as part of an overhaul of the Supplier Code of Conduct that sets out minimum ethical standards for government contractors.

“In light of what has occurred at PwC,we’re reviewing our contract clauses related to the engagement of consultancy firms – and if we can strengthen the code of conduct,we will,” a spokesperson said.

But opposition finance spokeswoman Jess Wilson said the government must explain why it was appropriate to continue receiving tax advice from PwC.

“The Andrews government must review its tax-related relationship with PwC and not enter into any future tax-related contracts while these matters remain outstanding,” she said. “Victorians are rightfully asking why these consultancies are necessary.”

Greens deputy leader Ellen Sandell called for a wider freeze on all future contracts with PwC. “Given the recent tax leaks,Victorians should expect the government to act,not just rely on assurances from PwC,who clearly can’t be trusted right now,” she said.

The tax leak scandal has highlighted the problem of the government’s growing reliance on consultants in general and the “big four” professional services firms – KPMG,PwC,Ernst&Young (EY) and Deloitte – in particular.

Integrity experts have repeatedly warned of potential conflicts of interest when consultancies have privileged access to sensitive government information while also advising private clients about government policies,programs and projects.

The Victorian Auditor-General reported last week that the state had spent $671 million on consultants in the five financial years to June 30,2022. After KPMG,PwC was the second-biggest earner,winning almost $80 million of work.

The figures are broadly consistent withrevelations by this masthead in March that spending on consultancies had tripled since the Andrews government was elected,with government departments spending almost $1 billion over eight years.

Asked for details about contracts signed this year with the Victorian government,a PwC spokesman said it was not the company’s role to provide such detail. “These questions are a matter for the government and its departments,” he said.

In an open letter late last month,PwC chief executive Kristin Stubbins apologised for the leaking of the tax law details and promised to work to rebuild trust in PwC.

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