COMMITTEES

Senator BARBARA POCOCK (South Australia) (17:39): In respect of the government response to the Finance and Public Administration Legislation Committee's report on the Public Governance, Performance and Accountability Amendment (Ban Unethical Contractors) Bill 2025, dated June 2026, I move: That the Senate take note of the document. This is a one-page response.

It is a pathetic response in view of the current public interest in the big four contracting firms, partnerships, and the way in which they are riding roughshod over the ethics, the dollars, the tax contributions of the Australian public to services across our nation. Every single day, there is more evidence of the rot at the core of the auditing, assurance and consulting sectors.

These are issues that this parliament and Senate have pursued—and I acknowledge your own contribution, Acting Deputy President Colbeck, on this question. We have pursued these issues for over three years, through three different inquiries, yet we still haven't seen major structural response. We have not seen a calling out of the opportunity to create an opportunity for banning these unethical contractors when they go totally off the rails, totally rogue with billions of dollars of government money.

The government must use its purchasing power to ensure ethical procurement. Unfortunately, Labor and the Liberals are content with the current status quo for procurement, despite continuing ethics violations from the big consulting firms. This bill would strengthen our procurement.

It would strengthen it by preventing unethical contractors from winning government contracts. It'd put new requirements on procurement officials to not give contracts to entities or persons who have engaged in unethical conduct. This should be the bare minimum.

If there are not penalties like this, we are going to continue to see unethical conduct on a massive scale in our country in government contracting. We need a national debarment regime. The OECD, the Senate economics committee, the Australian Law Reform Commission, have all recommended a reform of this nature.

Many stakeholders to repetitive inquiries have agreed that such a regime is overdue and is sorely needed. At least 20 other jurisdictions around the world and in our own country already have this, and they have it without having endured the two massive scandals that Australians have watched unfold in astonishment in recent years. The second recommendation of our dissenting report was should the Senate not pass this bill, the government must bring Australia in line with other countries and develop its own centralised debarment and suspension regime.

The government just noted this recommendation and listed their minor tweaks to procurement notes and training—a completely inadequate response to the national scandal we are enduring. It falls so short of community expectations. This is a bill that I introduced in the wake of the PwC scandal, the first massive scandal that this parliament has seen unfold.

PwC are the epitome of an unethical supplier. They colluded with foreign multinationals to defraud our tax system. They refused to cooperate with government inquiries, and they have still not provided key documents to this chamber.

PwC were never banned from bidding for government contracts, but, in the absence of a debarment regime, they instead voluntarily stepped aside through a mutual agreement. The Commonwealth does not currently have a clear power to ban a firm that monetises confidential Treasury information or falls into other forms of unethical practice—the kind that we are now seeing unfold in KPMG.

This must change. The need for this bill is overwhelmingly evident as a result of the unethical behaviour of PwC and now KPMG, and despite strong opposition from a number of senators involved in this matter—and I acknowledge you in the chair, Senator Colbeck, and Senator O'Neill, who was there before you—and all of that work, the Department of Finance has allowed PwC back into the fold of government contracting.

It's a gutless decision that betrays the Australian people who have, very rightly, held the expectation that the rogue consulting firm PwC would be held to account. But, don't worry, the evidence continues to mount. Increasing amounts of evidence are showing up as repetitive forms of unethical behaviour are revealed—slowly extracted from the firms themselves, slowly pulled into public view, against the resistance of these very large, extremely remunerative, very wealthy big corporations, big partnerships.

This bill is even more important now given the unfolding, rolling scandal within KPMG, where the sins are multiple. Senior partners have misused confidential client information to win very, very lucrative audit work. They were denied by the firm as behaviours.

They were brushed aside by a half-arsed legal investigation for months. There were breaches of audit independence and multiple instances of cheating on internal exams. How many examples of this unethical practice do we need?

People have lied to the Senate about the firm not power mapping, when in fact they did in multiple ways on many occasions. Other examples include overcharging Defence while raking in billions of dollars; mistreating and harassing multiple whistleblowers, including Brendan Lyon in the TAHE matter in New South Wales and the more recent experience of a brave new whistleblower—who knows how many other whistleblower chapters there are in KPMG and in other firms that we are yet to learn about, which we have to extract like pulling teeth through applying the resources of the Senate—attempting to use legal professional privilege repetitively to obscure the work of this parliament and ASIC; and not notifying the Department of Finance of recent developments and incidents as required by their contractual obligations.

The list goes on. I am told that the last hearing that was held in this parliament on the KPMG matter on 19 June attracted 60,000 viewers over the one day of the hearing. That is a very unusual number of people paying attention across our country to this massive misuse of our resources by these very big firms.

People will also probably be watching this Friday 14 August in similar numbers as we try to learn more about what has gone on through a series of disastrous behaviours by this firm. It's a firm whose chief executive officer, chief operating officer, national managing partner of audit and assurance, chair and three senior audit partners have all either resigned, been fired or stepped down from their roles in recent days because of this scandal.

Just today, their general counsel, head of human resources and chief risk officer have finalised arrangements to leave the firm. This is unfolding day by day at massive cost to the Australian public and to those who are trying to work in the firm and have come there often as young people hoping for a career. Their lives are changed by these events and these betrayals and unethical practices.

The federal government's spending on procurement is substantial. In the past financial year alone, the government spent over $117 billion on procurement. KPMG itself made $2.3 billion last year, with a significant portion of that coming directly from government contracts.

This government and the Department of Finance must not do the same thing they did with PwC and let them back in the fold before all investigations are finished. The laws are inadequate. They need to change.

The government needs to stop the empty platitudes and insisting they've done enough to stop this from happening again. What they did with PwC has not prevented an even worse scandal, an historically significant scandal, to unfold on an even greater scale just a year or two after the PwC scandal. The government's three-month freeze on KPMG isn't even effective.

It's riddled with carve-outs. We are seeing millions of dollars go to KPMG. AusTender records show a new contract between KPMG and the Department of Defence for $5.25 million, which was executed on 1 July this year—three months after Senator O'Neill revealed in this chamber the nature of the unethical practices within KPMG and two weeks after the exclusion period itself began.

Despite the ongoing fallout over KPMG scandals and the government's own three-month contracting freeze on KPMG, Labor continues to dish out multimillion-dollar contracts to them. That's why we need a debarment regime. These firms should not be automatically entitled to public money.

They need to earn trust. If the government doesn't act on this issue, it's an endorsement of this incredibly poor behaviour. Two of the big firms have shown us they're not fit for government work.

The business model of PwC trumped ethics at the first hurdle, and the lesson from KPMG is the same—the use of confidential information to make money. As long as the government allows those unethical tenderers to get away with it, they are not doing the right thing. They're failing to police such appalling behaviour, and Labor needs to stand up to these vested interests, restore the public sector and call these huge firms to account.

We must see ethical standards across this sector. We've got to break up and regulate these sectors so that we get decent behaviour from them. Question agreed to.