The current debate grows out of a high profile tax advisory breach involving a major professional services firm, which triggered a wave of public scrutiny and a Senate inquiry launched in 2023. That scandal saw the firm offload its public sector consulting arm for a symbolic $1, prompted government agencies to sharply reduce their reliance on large consultancies and led to tougher rules on tax advisers and contracting. Since then, the government says it has changed how it buys external advice, with thousands of public servants given extra training to tighten procurement practices.
In its delayed response to the inquiry’s 12 bipartisan recommendations, the government highlights measures already in place, including more detailed contract disclosure, stricter rules for engaging consultants and explicit requirements for knowledge transfer so in house teams gain skills during projects. Around 12,000 officials have undertaken procurement training over the past four years and new expectations now push service providers to act in the public interest, manage conflicts more rigorously and align parts of their ethical standards with public sector values. However, Labor has rejected a proposal for a parliamentary committee with the power to review and approve consulting deals of $15 million or more, warning this could politicise purchases and create legal risks even as some in parliament argue it would simply strengthen scrutiny and value for money checks.
Looking ahead, the bigger reform agenda seems to sit with a separate Treasury review into the regulation of large accounting and consulting partnerships, which closed submissions in mid 2024 and has not yet been released. That review is expected to examine fragmented, relatively light touch rules covering audit, tax and insolvency work that are viewed as systemically important to the economy. In the meantime, the government is only partially embracing calls for tougher measures such as a public register of conflict of interest breaches, mandatory reporting to parliament by professional bodies and temporary bans on specific firms. The response suggests a preference for incremental tightening of procurement rules over sweeping structural change, leaving open questions about whether these steps will be enough to rebuild trust in how Canberra uses external consultants.
