Expect a fierce response to Labor’s PwC reforms

afr.com:

The key to the ambitious changes the government is promising in response to the PwC leaks scandal will be in the execution – how much of it can Labor get up?

Few would cavil at the government’s conclusion that the system for regulating tax advisers is not “fit for purpose” after the PwC debacle, but previous attempts to rein in the powers of consultants and accountants have a fraught history.

The proposed reforms are all hot button issues that are likely to trigger strong responses by lobby groups and more general business concerns. Bloomberg

In 2007, Australia was about to introduce tranche two of the anti-money laundering provisions which were already in law, to require accountants, lawyers and real estate agents to report suspect transactions – only for lobbyists to block the change again and again and again, even as the rest of the world adopted the measure.

The government is now having another go at it, 16 years later, and that’s the least contentious measure in this space.

Then there was the 2017 recommendation by the black economy taskforce that firms with a history of using or marketing aggressive tax avoidance schemes should be barred from government procurement contracts – a measure that PwC helped defeat, convincing the Tax Office last year instead to settle for a self-regulation scheme, the large market tax adviser principles, which did nothing to stop PwC’s ongoing cover up of its leaks scandal.

Reforming this area is hard. But the PwC scandal, and the light now being shone by Four Corners and others on questionable behaviour across the big four firms, has created a unique opportunity for reform.

With tax promoter penalties the government is going for the nuclear option. It was extraordinarily unlikely that