A parliamentary inquiry will scrutinise the heavy reliance on consultants by the New South Wales government in the wake of the PwC tax leaks scandal engulfing the Commonwealth.
The inquiry into the use and management of consulting services was opened by the Public Accountability and Works Committee on Thursday night, its first in the new Parliament.
The inquiry is set to investigate the “transparency of the work undertaken by consultants” and whether they “are being used strategically and in a way that delivers value for money”, according to the terms of reference.
It will also look at procurement policies and any “measures to prevent conflicts of interest, breaches of contract or any other unethical behaviour”, as well as the practice of ‘consultant shopping’.
A series of audits over the past six months have highlighted the state government’s over-reliance on the same consultants, particularly those from the Big Four consulting houses.
Just weeks out from the March election, the NSW Auditor-General found that around $1 billion had been spent on consultants over the past five years through more than 10,000 engagements.
Many of the contracts were found to have breached procurement rules and lacked effective contract management.
PwC, the consulting firm responsible for the tax leaks scandal, received $57 million from the state government during this period, according to the audit, trailing only KPMG and Ernst & Young.
Greens MP Abigail Boyd, who was elected chair of the Public Accountability and Works Committee on Wednesday, said the inquiry – which the Greens committed to ahead of the election – had had become “all the clearer” after the leaks.
“The PWC scandal is just a symptom of a far more systemic issue,” she said.
“This inquiry is going to be a comprehensive investigation of just how intertwined these consultancy firms have become within all layers of government, and how this seemingly parasitic relationship is degrading our public sector capacity.
“Breaches of confidentiality and trust are of course of enormous concern, but the purpose of this inquiry goes beyond that.
“I’m particularly interested in investigating exactly how far these enormous private consulting firms have burrowed into the machinery of government, displacing public sector workers and depleting our capacity for self-sufficiency.
“The links between these firms and government go far beyond consultancy contracts.”
Last week, the Minns government committed to changes that will see consultants and advisers face multi-million dollar fines and shadow bans if they breach trust.
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