‘Not fit for purpose’: Sweeping response to PwC scandal
Consulting firms caught promoting tax exploitation schemes will be fined up to $780 million, a 100-fold increase, under the Albanese government’s sweeping response to the PwC tax leaks scandal.
A two-year Treasury review of the regulation of all professional firms; the removal of secrecy rules hampering the ATO and more power for regulators are also part of changes designed to fix a system deemed “not fit for purpose”.
Announcing the changes on Sunday, Treasurer Jim Chalmers, Finance Minister Katy Gallagher, Attorney-General Mark Dreyfus and Assistant Treasurer Stephen Jones said they signalled the biggest crackdown on misconduct by tax advisers in Australian history.
Treasurer Jim Chalmers will help push the government’s response to the PwC tax leaks scandal through parliament. Louise Kennerley
“The PwC scandal exposed severe shortcomings in our regulatory frameworks,” the ministers said in a statement.
“By increasing penalties, giving regulators stronger teeth to investigate and prosecute perpetrators and boosting transparency, collaboration and coordination within government, we are acting to restore public confidence and help prevent this from happening again.”
It marks the most substantive reaction to the PwC leaks, first reported by The Australian Financial Review, which have also triggered a criminal investigation by the Federal Police, two federal and one state parliamentary inquiries, and caused federal departments to terminate contracts with the big four firm.
The government has also flagged that the light-touch regulation of Deloitte, EY, KPMG and PwC could be coming to an end. Treasury will examine the governance obligations of these firms in areas such as transparency, executive responsibility, management of
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