KPMG Australia's pause on bidding for new federal government work now runs to 28 February 2027, and the firm is weighing a second round of redundancies, the Canberra Times reported on 23 October.
The Department of Finance's procurement policy note, updated on 23 October, says KPMG "has agreed with the Commonwealth that it will temporarily cease new contract engagements with Australian Government entities subject to the Commonwealth Procurement Rules (CPR) until 28 February 2027". Existing contracts can still be varied or extended where an agency's accountable authority approves.
A reader at the firm told The Aussie Corporate the ban had been "extended till 28th Feb" and that the firm was "hinting at more changes, especially to Canberra office where many people are without client work". Directors were "struggling without being able to bid/win work", the reader said.
The Canberra Times reported that insiders say KPMG is considering a second round of redundancies and that staff have been leaving in large numbers. The paper said the firm has not set a target or decided on a second round. A former Canberra-based employee told the paper that staff there had worn the consequences of events that began in the Sydney office. "We've done nothing wrong, yet we're being punished," the former employee said.
KPMG has not said publicly whether a second round will go ahead, how many roles it would cover or how the Canberra office would be affected. In its response to the Watt review on 22 October, signed by chief executive John Sams and independent chairman Michael Ebeid, the firm said it "has agreed to maintain the pause on bidding for new Commonwealth work until 28 February 2027" and would work with Finance to agree "an Implementation Plan, reporting regime and other activities over the coming weeks and months". "The report lays bare our failings and highlights the hard work that we must do to address them," it said.
The first round
KPMG announced its first round of cuts on 24 August, with its results for the year to June 2026. It said it would reduce its workforce by about 5 per cent, 27 partners and around 360 employees, mostly in Consulting and Business Services, the firm's release said. Consulting revenue fell 16.9 per cent. Mr Sams said the firm had "made the difficult decision to reduce our workforce and restructure parts of the firm" and that "We expect difficult market conditions to continue in FY27 and beyond."
How the ban began
Finance and KPMG agreed in June that the firm would not bid for new Commonwealth work from 16 June to 30 September 2026 while Finance commissioned an independent review of its governance, culture, ethics and integrity frameworks, the department's June note said. Finance said it was managing "the Commonwealth's response to the ethical concerns arising from KPMG's use of confidential client information". The ABC reported on 16 June that Finance Minister Katy Gallagher said the government was "very concerned" by the allegations, first aired in the Senate in March.
The pause was extended to the end of October while the review ran on, the Canberra Times reported on 11 September. Dr Ian Watt AC delivered his report on 14 October and Finance published it on 22 October. Finance says the review "found that KPMG failed to respond appropriately to concerns raised by a whistleblower". The ABC reported on 22 October that Dr Watt said "Virtually all of KPMG's staff had no involvement in the events that occurred."
Finance says it will give agencies further advice before the end of the extended period.
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