PwC Australia CEO Kevin Burrowes
PwC Australia CEO Kevin Burrowes is giving evidence as a Senate inquiry into consultancy firms. Image by Lukas Coch/AAP PHOTOS
  • politics

‘Totally unacceptable’: PwC boss sorry for tax scandal

Andrew Brown October 12, 2023

The new head of PwC Australia has issued a public apology for the embattled firm’s role in a tax advice scandal.

Chief executive Kevin Burrowes appeared before a parliamentary inquiry into consultancy firms, where senators grilled him over PwC’s conduct.

The inquiry was set up following revelations partners at PwC passed on confidential Treasury information to boost its private sector business.

Mr Burrowes said the conduct of staff and the actions of PwC should not have occurred and issued a mea culpa.

Richard Colbeck
 Senator Richard Colbeck said an internal report painted a bleak picture of how PwC operated. Image by Lukas Coch/AAP PHOTOS 

“What happened is totally unacceptable, for this I am sorry,” he told the inquiry on Thursday.

“We cannot apologise strongly enough for breaching the trust placed in us and we accept the justifiable questions about our trustworthiness and integrity … we were meant to serve and help you but we have let you down.”

Thursday’s hearing is the first time PwC executives have answered questions from parliament about the tax advice scandal since the controversy became public.

The inquiry chair, Liberal senator Richard Colbeck, said the appearance of PwC had been held back to allow Australian Federal Police to carry out investigations.

While an internal company report on the conduct of PwC and how its culture should change had been completed, Senator Colbeck said it painted a bleak picture of how it operated.

“It was almost depressing every time I started a new section of the report because it basically reinforced at each level how crap things were inside your business,” he said.

“I find it hard in polite terms to describe how offended I am as a member of the then-government that was introducing significant tax changes in the interest of the Australian people.”

The report, by former Telstra boss Ziggy Switkowski, found PwC had developed a “whatever it takes attitude” that allowed poor behaviour to be overlooked.

 PwC had a “whatever it takes attitude” that allowed poor behaviour to be overlooked, a report found. Image by Joel Carrett/AAP PHOTOS 

He was scathing of an overly collegial culture within the firm, which made it easier for blind spots to be overlooked and for the chief executive’s power to be amplified.

Mr Burrowes maintained the only breach of Treasury information was the start date of proposed tax laws and not how companies should be set up.

Mr Burrowes’ predecessor Luke Sayers also apologised for the company’s actions when he appeared at the inquiry.

Mr Sayers, who was chief executive between 2012 and 2020, said he had no knowledge of the tax scandal during his tenure.

“When I left PwC I did not know of breaches of confidentiality agreements in PwC’s tax business until this year,” he said.

“If the ATO had directly and formally advised me as the CEO of PwC Australia that (partner) Peter Collins has breached obligations of confidence, I would have sought details and ensured a full and thorough investigation.”

The former chief executive said he tried to break up the organisation in 2018 because of conflicts of interest, but the move was rejected by higher management.

Former PwC Australia CEO Luke Sayers at a committee hearing
 Luke Sayers said he had no knowledge of the tax scandal during his tenure as PwC Australia CEO. Image by Lukas Coch/AAP PHOTOS 

“I was becoming more and more concerned about the depth and breadth of professional services firms here here in Australia. I was becoming concerned about the the audit quality,” he said.

“We thought that if we divested the consulting business then obviously that would free up that business to take on additional capital.

“The decision was taken by global (management) that … it was not pragmatic to sell off a piece of global consulting here in Australia.”

He confirmed six international partners were under investigation for not raising they had received confidential information.

Greens senator Barbara Pocock said the firm needed structural reform.

“We need regulations with teeth that give the Australian people confidence about what’s going on inside these large firms, that they’re getting value for money when they’re doing government contracts,” she told reporters.