Politics Analysis

The PwC disaster — Neoliberalism on steroids

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(Screenshot via YouTube)

Australians are tired of neoliberalism. We are sick of that much talked about and ever-widening gap between the haves and have-nots.

The idea that endless privatisation and unfettered corporate greed will somehow leave us all better off no longer appears to be swallowed by the vast majority of Australians. Certainly, public confidence in our political leaders as well as in our institutions has been severely eroded in recent years.

PUBLIC PAIN FOR PRIVATE GAIN

This week, the Pricewaterhouse Cooper (PwC) scandal – in which nine (as yet unidentified) partners of the consultancy firm enlisted to help the Coalition Government design tax laws, leaked confidential Treasury information to benefit PwC's private clients – has left Australians outraged.

And if that's not enough, it was revealed on Tuesday (30 March) that PwC is also:

“...The internal auditor of both Treasury and the AFP.”

This adds another level of complication to an already convoluted matter, given the Australian Federal Police (AFP) chose not to investigate the matter, despite being urged to do so by the Australian Tax Office (ATO) over a period of two years.

Appearing before Senate Estimates, ATO Commissioner Chris Jordan said:

“After sharing the information with the Australian Federal Police (AFP) over the period 2018 and 2019, and providing a number of documents upon their request after our initial sample of the emails, we had to ultimately formally refer the matter to the Tax Practitioners Board in July 2020."

Jordan explained that once the AFP investigation was closed the only option was the Tax Practitioners Board, since:

“There was nowhere else to go.”

But an AFP spokesperson said there was "insufficient information" to proceed.

According to a report in the Financial Review:

“The AFP assessed, based on the material that the ATO provided, was that there was insufficient information in the material, to support a formal referral ... In consultation and agreement with the ATO, the matter was closed in 2019.”

Greens Senator David Shoebridge likened PwC advising the Government to "Dracula at the blood bank" after it was discovered that PwC also still has access to the Defence Secret Network.

SHARING BUT NOT CARING

And Australians watched, mouths agape, as the PwC tax scandal finally exploded, resulting in nine directors being "stood down" and our government institutions – to which the firm still consults – were left exposed. Of course, since PwC is a private company, no information has been shared with the public as to who these directors may be, what is meant by "stood down" or what redundancies they may take with them if their directorships are ever severed — never mind disciplinary action.

It's a pity sharing information about its own lack of accountability does not appear to be a likely move from the consultancy firm that has received eyewatering amounts of taxpayer funds for advising the Federal Government — before also sharing confidential government information with its own client base. 

And it's not only PwC that contributes to this "shadow public service" concept so favoured by the former Coalition Government. An audit (not conducted by PwC, thankfully) has shown close to $21 billion was spent by the Morrison Government on external labour hires in the public service in 2021-22, alone.

The Coalition Government actively depleted the public service, maintaining a cap on government employees and relying more and more on external companies to "plug the gaps" as Federal Minister for Public Service Senator Katy Gallagher put it.

Today, interest rate trigger-happy RBA Governor Philip Lowe condemned PwC's conduct, before stating the firm will nevertheless continue to audit the Reserve Bank. Of course!

THE OLD PRIVATISATION TRICK

Meanwhile, the mainstream media’s most hated state leader, Victorian Premier Dan Andrews, has enjoyed a 6.5 per cent increase in support since the 2022 State Election, while the Liberal Opposition is down 6.5 per cent. It is not too much of a stretch to posit that the decision by the Andrews Government to restore the State Electricity Commission in Victoria has contributed to voter trust in his Government.

Victoria became the most privatised of states after former Liberal Premier Jeff Kennett sold everything except the site on which the Victorian Parliament sits — though given time, this too may have been on the cards. 

Is it any wonder, then, that as Liberal National parties across the nation pushed for further privatisation and more outsourcing of government agencies, voters turned away in droves?

Yesterday (31 May), Prime Minister Albanese reiterated Labor's election promise to rebuild the capability of the public service and reduce government dependence on external contractors. Well, if the PwC example is anything to go by, such a move certainly can only be an improvement on the previous regime's private consultancy mentality that has resulted in the plunder of our assets and economy, our government services and our faith in institutions.

Let's hope that the Albanese Government achieves this important step in putting people before profits — at least long enough to restore some sanity to our institutions and a modicum of faith in our leaders.

This editorial was originally published as part of the Independent Australia weekly newsletter – usually only available to subscribers – and may be read online in the IA members-only area.

You can follow IA managing editor Michelle Pini on Twitter @vmp9Follow Independent Australia on Twitter @independentaus and on Facebook HERE.

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