The Australian government and conservative opposition parties are calling on PwC Australia and PwC International to comply with the requests of a powerful parliamentary committee and provide documents essential to the understanding of what transpired in the tax leak scandal.
PwC Australia had recently argued various documents requested by members of the Parliamentary Joint Committee on Corporations and Financial Services were confidential, and as such would not be provided to the committee.
This included material requested by Liberal Party senator Paul Scarr related to arrangements linked to an additional A$1.2 million (US$811,000) in remuneration received by PwC Australia chief executive officer Kevin Burrowes from PwC’s global network.
That A$1.2 million is being paid to Burrowes on top of his A$2.8 million remuneration from the Australian firm for being its chief executive.
Senators Deborah O’Neill, the committee chair, and Scarr, have both said that the additional payment appears to be a conflict of interest because PwC Australia is subject to supervised remediation by the firm’s global network.
Australian treasurer Jim Chalmers exclusively told ITR that he expects companies that are requested to provide documents by a parliamentary committee to do so as a part of any inquiry.
Chalmers said that the PwC scandal had exposed what he called “severe shortcomings in our regulatory frameworks” and that the government was taking significant steps to clean up the mess.
“We’re cracking down on misconduct to rebuild people’s faith in the systems and structures that keep our tax system and capital markets strong, and we're taking steps to end the scourge of multinational tax avoidance,” Chalmers said.
“While specific documents are a matter for the committee and PwC, we expect every company to comply with requests from parliamentary committees.”
Shadow assistant treasurer Luke Howarth – a member of the conservative coalition parties – told ITR the firm should provide documents to the committee that will allow parliamentarians and the general community to more fully understand what transpired with the tax leaks scandal.
"PwC International’s lack of cooperation with the parliamentary joint committee so far is concerning and documents should be provided to the parliament and the community where the material provides further understanding of what happened in the tax policy confidentiality breach,” Howarth said.
“Further scrutiny and any government responses should be focused at PwC. Unfortunately, so far, the government has missed the mark with its response and has made 72,000 tax practitioners collateral damage in response to PWC’s misdeeds."
The call from both Chalmers and Howarth for PwC to cooperate more fully with the parliamentary committee comes at a time when professional bodies are negotiating the final wording of a determination that introduces eight new ethical obligations for tax agents.
Assistant treasurer Stephen Jones narrowly avoided the instrument being disallowed by the Australian Senate last week after he agreed to other significant modifications to wording to ensure the professional associations were comfortable that the new rules would be workable.
Jones has pledged to ensure the revised wording is exposed and that comments are sought from affected parties before the regulation is formalised.
The determination was issued by Jones on July 2 and the vague wording led to a two-month campaign by affected associations to make the regulation fairer on tax advisers.
