KPMG today faces the powerful Parliamentary Joint Committee on Corporations and Financial Services.
The large, diversified firm has received a three-month ban from new government work after mishandling a whistleblower complaint, but the Albanese Government is yet to adopt recommendations from two parliamentary inquiries into misconduct by management consultant firms.
Key details:
- The Australia Institute calculated in 2023 that the federal government's yearly spend on management consultants (at the time) could employ 14,700 public servants.
- The Parliamentary Library found this year that the federal government has 297 active contracts with KPMG, worth $653 million.
- The contracts run for about two years on average.
- $653 million could employ about 2,200 public servants for two years, greater than the workforces of major departments like the Attorney-General's Department (1,795 staff) or Department of Education (1,638), or agencies like the Bureau of Meteorology (1,803), the Australian Electoral Commission (1,045) or the Criminal Intelligence Commission (886).
- The government's in-house, public servant-run consulting firm employed just 32 people last year.
- Last term, two parliamentary inquiries (1, 2) identified the need for sweeping reforms to how management consultants are regulated and how the government uses them. The Albanese Government "noted", rather than agreed to, many of the recommendations.
"The Albanese Government has been fooled by crocodile tears from management consultants, forgiving PwC for its abuse of government information and only banning KPMG from new work for three months," said Bill Browne, Director of The Australia Institute's Democracy & Accountability Program.
"Big, international consulting firms like KPMG and PwC milk the government for all it's worth, hollow out the public service and use their privileged access to line up yet more work at public expense.
"KPMG was already infamous for its NSW Transport scandal, so the question is why the Reserve Bank and other government agencies ever thought it was appropriate to award the firm millions of dollars.
"Green and Liberal senators introduced legislation that would hold management consultants to account, but Labor-dominated committees rejected these bills and the government has not even responded to them.
"The $653 million in taxpayer money going to KPMG could instead expand the Bureau of Meteorology, the Fair Work Ombudsman, the Domestic, Family and Sexual Violence Commission, the Emergency Management Agency and other government services that Australians actually benefit from."
Figure 1: Public servants KPMG contracts could instead employ, versus current full time employee staffing levels at select agencies
Note: Public servant pay is calculated per employee, not by full-time equivalent. However, most public servants work full-time.
