PwC Australia’s Government Revenue Plummets Amid Tax Leaks Scandal and Consulting Arm Sale

PwC Australia has seen a dramatic reduction in revenue from government contracts, plummeting from A$260.6 million (US$9.5 million) to A$14.4 million following the fallout from a tax leaks scandal that has dominated Australian political discourse for over 18 months. The decline is partly attributed to the sale of the firm’s government consulting arm to Allegro Funds and a general reluctance within the government to engage with the firm in the wake of the scandal.

A recent response from the Department of Finance to a question on notice posed by Australian Greens’ Senator Barbara Pocock revealed that PwC Australia received contracts totaling A$260.6 million between July 1, 2021, and March 31, 2022. This figure contrasts sharply with the mere A$14.4 million the firm earned from government work between July 1, 2023, and March 31, 2024.

Senator Pocock had inquired in May about the extent to which the decline in government consulting expenditure was due to a reduction in direct contracts awarded to the ‘big four’ giant. The sharp drop in revenue can be traced back to when the Tax Practitioners Board disclosed that Peter Collins, a former partner at PwC Australia, had leaked confidential information regarding the government’s multinational anti-avoidance legislation. This legislation was specifically designed to curb global entities' ability to minimize their tax obligations.

The Department of Finance’s response during the most recent estimates hearings in May highlighted the significant impact the scandal has had on PwC Australia’s government contracts. In addition to the firm’s sale of its government consulting arm in 2023, the government’s reluctance to engage with the firm further contributed to the decline in revenue. Moreover, an agreement was reached between PwC Australia and the Department of Finance that the firm would not seek to tender for government contracts until December 2024.

A procurement note issued by the Department of Finance in April disclosed this agreement, stating, “PwC Australia has agreed with the Commonwealth that it will temporarily cease new contract engagements with Australian Government entities captured by the Commonwealth Procurement Rules until December 1, 2024.” The note further explained, “This timeframe will allow PwC Australia further time to implement the Switkowski Review recommendations and for the current investigations and inquiries to be progressed.”

These developments underscore the ongoing challenges PwC Australia faces as it navigates the repercussions of the tax leaks scandal and attempts to restore its standing in the eyes of the Australian government.

By fLEXI tEAM