MOTIONS

Senator O'NEILL (New South Wales) (17:17): This is a speech that you would hope you wouldn't have to make in the country in which we live. I know your contribution through F&PA, Acting Deputy President Colbeck, as the former deputy chair, has been acknowledged by your colleague Senator Paul Scarr as important in revealing some of the appalling practices that seem to live and thrive in a toxic culture that has now been revealed at both PwC and KPMG in the public space.

I acknowledge once again, and it's the second time this evening I've been able to speak happily about, the collaborative nature of important work we can do for our country in this place, the Parliament of Australia and the Senate of our nation. When I arrived here, I was truly humbled to walk through the doors of this place and serve the country that my parents came to—as immigrants; that debate rages—with very little education and very little opportunity.

They came to a democratic country where the rule of law is respected, operates and provides incredible levels of opportunity and protection for the Australian people. That's what we want to happen here. I acknowledge the great contributions of my colleagues who are sitting here on the Senate floor alongside me, Acting Deputy President Colbeck.

Senator Scarr has just made another profoundly important contribution to thinking about what we do as we go forward in response to the problems that are becoming manifest to Australians. We've been working on this for a very, very long time on the Joint Committee on Corporations and Financial Services. I want to also acknowledge the crossbench in a way that is not commonly reported in the public.

I have been working so closely with my colleague Senator Barbara Pocock on both the F&PA committee and also on the corporations and financial services committee to do the work that we have done to bring what can only be described as a very dry subject into the public realm. At the heart of why we do this is the question that needs to be asked: why is this important?

It's in the answer to that question that we will find our resolve to undertake the necessary change. Why is this matter important? I think Australians are beginning to wake up to why it is so important for them that we do this work, that we do it carefully, that we do it collaboratively and that we do it in a time sequence that is responsive to the challenge that is there but not in a rushed and haphazard way filled with outrage and alarm.

Good governments of any persuasion take the task of reform seriously. They consult. They do the very best they can to bring things forward.

That is the way that I think we need to proceed with this matter. The reason that what we are talking about matters—about those four little letters on the Notice Paper today, K-P-M-G—is because Australians now have $4½ trillion under management because of our superannuation system. It was a great development for Australia that a Labor government established the superannuation system.

Now every working Australian has a share in the future wealth that is generated by investment in a range of companies both in Australia and overseas. Whether you're managing your own superannuation in an SMSF, or perhaps you've got money and have just started your first job and you've got a thousand dollars being managed by your industry super fund, or you are in a retail fund and having some choices about what's going on by negotiating with a broker about what you want to do, all of the decisions, no matter how your superannuation is invested, rely on the truth of the documents that are provided by these massive companies in which we are all invested.

What has been shown to occur in the case of the KPMG matters is that the people who are supposed to verify the authenticity of those books on which decisions are made and that basically the financials are accurate—those people called auditors in a position of profound trust and centrality to the proper functioning of the markets—have not been operating in anything that approaches an ethical disposition.

We have seen evidence of profound breaches of professional responsibility by these auditors who are given huge access to what's going on in the companies. We've referred to Lendlease. Senator Scarr mentioned the leadership of Lendlease talking about how they felt when they found out, after the fact, about how their confidential information was used.

KPMG shows up as an auditor, and, as is required by the law, Lendlease had to open all of their books for inspection. Mr John Gillam, Lendlease's chairman, described the misuse of confidential client information by KPMG as 'a grave misuse of their access privileges'. He says, 'We were deeply disconcerted.' Now 'grave misuse of access privileges' means that when KPMG went in, instead of acting to see everything and then retreat quietly without sharing anything that they had seen in any way with anyone else, they failed.

Absolutely and totally, they failed. They took information away with them. Not only did they fail in taking that information which should have been confidential; they then sought to use it for their own advantage.

It's this pursuit of money, this pursuit of some prestige that apparently they think comes with money no matter how you get it, that is driving the sorts of behaviours that are now becoming known to the Australian people. I found it extraordinary when reports from my office and also from members of the media who have been covering this indicated that upwards of 78,000 people had watched the YouTube video of a hearing on Friday.

It's an extraordinary indication of interest in what is happening in this place. It wouldn't have ever got to that point but for the courage of an individual who was inside KPMG. No matter what they were promised—no matter the lure of millions of dollars, potentially as a partner—the moral fibre, the moral fortitude, the discernment and the ethical disposition of the whistleblower, who saw egregious behaviours of theft of information, sharing of information and basic lying to their own clients, meant that the whistleblower had courage enough to put forward a document.

So here we are. It's June 2026. This journey started for that whistleblower in 2022-23.

By 30 May 2024, the whistleblower had determined that this matter could not go unaddressed and wrote to a senior audit provider, one of his direct reports, about failures of audit quality with regard to Dexus, Telstra, Macquarie Bank, Westpac, SingTel Optus and of course Lendlease, to whom I've been referring. Without the courage of that whistleblower to document what had been observed, we would still not know that one of these big four entities, so vital to the success of our financial markets, had done what they'd done.

That careful document was basically used inside KPMG not as an opportunity to be appalled at what was being reported but rather as a document to be managed, and the person attached to it, our whistleblower, was turned into a person to be managed. Many people don't know much about these big companies or about what an office of general counsel is. I certainly didn't have anything to do with that world before I came here.

But a lawyer inside a big company is a common thing. That's what a general counsel is. In this circumstance, the office of the general counsel was used as a tool to silence the whistleblower.

We know that, within a couple of days of material being proffered by this whistleblower to his direct report, his own laptop was searched without his permission. And that pattern goes on. In addition to using the office of the general counsel to silence this person, we find later on in our hearings that, when frustrated by all of the processes inside KPMG, the whistleblower goes to the independent directors and there's a not-virtuous circle established by none other than the chairman of the board, who tells the independent members: 'If you hear from the whistleblower, jump up and talk to the office of the general counsel.' Again, it's another tool of oppression, another tool to silence the whistleblower in the most disgraceful way.

That is just one tiny chapter of the volumes of information that we have received about failures inside KPMG. Critically, there is a massive failure in terms of the structure of these companies and the way they have been allowed to operate. I'm very proud of the work that we did, and I see my two very engaged colleagues sitting here with me.

We had 40 recommendations in the report that we advanced about how we might move forward. I know that there was one contentious matter for us, and that was about how many partners there should be. There are a thousand people that are all in on what KPMG did, because that is the level of partners you can go up to.

We know that it's about 680 at the moment, but the upper level is a thousand. That's a thousand partners who are not governed in any way by ASIC or any federal entity or anyone who has reached into that partnership. We know that ASIC can capture a few company auditors.

That is a critical breaking point in the proper supervision of those who are in these positions of profound responsibility. There is so much more to say. We have so much more work to do.

This is not an end point for us but rather a renewed and invigorated commencement of making sure that the reform that needs to be undertaken is undertaken, and the committee will continue its work. Debate interrupted. Senate adjourned at 17:30