KPMG partner spat goes public
A dispute between two ex-KPMG partners who advised NSW government officials over a controversial transport entity has gone public, after one accused the other of using a federal parliamentary inquiry to take “revenge” on her by making a submission full of “unfounded assertions”.
Then-KPMG partner Heather Watson appeared before the parliamentary inquiry into the Transport Asset Holding Entity (TAHE) in 2021.
Heather Watson, in her own submission to a federal inquiry into the use of consultants by the public service, defended her work advising on the development of the Transport Asset Holding Entity and described comments by Brendan Lyon criticising her as “victimisation and retaliation”.
Mr Lyon referenced Ms Watson on four occasions in his 22-page submission to the inquiry, including a section about NSW Auditor-General Margaret Crawford discussing KPMG’s work on TAHE during a separate NSW parliamentary inquiry into the entity in 2022.
He subtitled this reference to Ms Watson as Ms Crawford “criticis[ing] the independence of KPMG’s work for the NSW Treasury”.
Ms Watson disputed this characterisation. She wrote in her 25-page submission that Ms Crawford’s testimony “contains no reference at all to the independence of consultants, of KPMG or me. With no reference, it follows that there can be no criticism”.
Ms Watson, who has left KPMG, provided advice to NSW Treasury between February 2020 and December 2021 on the TAHE, which new Treasurer Daniel Mookhey has vowed to dismantle.
A report by the NSW auditor-general released in January described the TAHE’s creation by the Coalition as a costly, ineffective and “unnecessarily complex” multi-year journey for a short-term budget benefit, which had inadvertently created a
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