Australia hires consultants to advise on consultants after PwC scandal

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The Australian government has hired a consultant to consult with on how best to deal with other consultants.

Sound convoluted? That’s the criticism that some Australians are making against the federal Finance Department after it hired an ethics consultant for advice about handling ties with PwC Australia and Scyne, an entity focused on government services that the consulting giant spun off after a tax-information leak scandal.

“It’s like outsourcing your conscience,” said Sen. Barbara Pocock, a member of the left-wing Greens who has been at the forefront of efforts to curb the use of consultants in public service.

Pocock, in an emailed statement, likened the situation to a scene out of “Utopia,” an Australian satirical TV series about bureaucrats, along the lines of NBC’s “Parks and Recreation.”

“Just imagine a bureaucrat in the Department of Finance saying, ‘We need to hire a consultant to advise us on how to hire consultants,’” Pocock said. The writers of “Utopia,” she said, “couldn’t have come up with a more laughable scenario.”

The senator raised concerns about the department hiring Scyne in a July letter to Finance Minister Katy Gallagher, a member of the center-left Labor Party, saying that employing consultants from the offshoot company “appears to have the effect of sidestepping accountability.”

In her response, which a spokesman for Pocock shared with The Washington Post, Gallagher said that the department had hired Simon Longstaff, a renowned philosopher and chief executive of the Ethics Centre, a not-for-profit organization. Longstaff would assist the government in assessing whether it could “have confidence in any future work [Scyne] delivers,” she wrote, in an apparent attempt to quell Pocock’s concerns.

The Finance Department said in an email that the contract was worth 32,000 Australian dollars, or nearly $21,000. Longstaff’s “significant knowledge and expertise in the field of ethics appropriately places him to provide the Commonwealth with advice on the range of ethical issues that may arise while engaging with PwC and Scyne,” the department statement said.

But the scenario has instead provided another example of what critics say is bureaucratic bloat that enriches consultancies at the expense of public agencies. The Australian government, then under right-wing coalition rule, hired more than 50,000 “external labour” employees between July 2021 and June 2022, at a cost of more than $13.5 billion.

News of Longstaff’s appointment was first reported by the Guardian’s Australian website.

“The Government should have a hands on role in managing the procurement of consultant services not relying on third parties to make critical policy decisions,” Pocock wrote.

The Ethics Centre referred a request for comment to the Finance Department.

The scandals and hypocrisy behind McKinsey’s sterling reputation

Major consulting firms have long been seen as prestigious collectives of some of the business world’s brightest minds, but the industry has drawn public ire in recent years over accusations of corruption or poor ethics. For instance, McKinsey agreed to pay nearly $574 million in 2021 to settle charges over its role in the opioid epidemic. Court documents show it had advised opioid-makers to target certain patients. At the same time, it was paid by authorities to advise them on combating the drug crisis.

Mariana Mazzucato, an economist at University College London and co-author of “The Big Con: How the Consulting Industry Weakens our Businesses, Infantilizes our Governments and Warps our Economies,” has argued that consulting firms are incentivized to prevent governments from becoming self-sufficient or otherwise not reliant on external advisers.

In Australia, PwC acknowledged that a partner had shared confidential government tax plans with colleagues, who then used it to try to win business from clients such as Google. PwC also said that its corporate clients did not use the information to benefit financially.

Sen. Deborah O’Neill, a Labor lawmaker who chairs a financial services committee, accused PwC of operating a business model “so clearly devoid of an ethical backbone,” the Sydney Morning Herald reported.

Bill Browne, director of the democracy and accountability program at the Australia Institute, a think tank, said PwC “has shown it cannot be trusted to continue receiving government work that can and should be performed by public servants.”

The Post was not able to reach Scyne for comment; the firm is so new that it does not yet have a full website. PwC, which has fired more than half a dozen partners over the tax information scandal, has apologized for its actions. It did not immediately return a request for comment Thursday.

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