Government Rejects Parliamentary Veto Over Major Consultancy Contracts
The Albanese government has firmly rejected a push to grant politicians veto power over lucrative consultancy contracts exceeding $15 million. In a significant response to a Senate inquiry into the consulting industry, Labor warned that establishing an oversight committee with such authority would create substantial legal risks and potentially breach international obligations.
Legal Concerns Over Contract Cancellations
In its detailed response to the long-awaited Senate inquiry, the government expressed concerns that allowing a parliamentary committee to block major contracts could expose the Commonwealth to liability if deals were suddenly terminated. The official statement emphasised that any improvements in oversight must not inadvertently undermine legitimate executive decision-making or lead to compensation claims.
"It is essential that any improvement in oversight should not inadvertently call into question legitimate executive decision-making [...] or compensation claims," the government stated in its formal response.
Limited Adoption of Inquiry Recommendations
The government sidelined the majority of recommendations outlined in the Senate report, arguing that significant procurement reforms had already been implemented following the PwC tax leaks scandal. This comprehensive overhaul of government procurement practices has been a key focus in recent years as the public service seeks to rebuild trust in its contracting processes.
One of the inquiry's primary recommendations, considered a proxy investigation into the PwC scandal, called on the big four firm to demonstrate transparency by publishing accurate information about partners involved in the confidential information leaks. Labor's response reiterated that this remained a matter for the firm itself to address.
Greens' Proposal and Ongoing Scrutiny
The government acknowledged but did not adopt a Greens proposal to implement a five-year ban on consulting entities led by former PwC CEO Luke Sayers. This comes as Mr Sayers' consulting firm, Tenet Advisory, secured a $522,500 contract with the Department of Climate Change and Energy last year, which concluded in December.
Following the PwC scandal, the firm divested its entire government consulting business in Australia, creating a spin-off entity called Scyne Advisory. The Finance Department lifted its ban on working with PwC Australia in August 2025, marking a significant development in the ongoing recovery from the controversy.
Transparency Portal Improvements
The Senate inquiry also criticised AusTender, the government's transparency portal for contracts, for lacking detailed and consistent descriptions. Labor responded by agreeing in principle that overall usability needed enhancement, pointing to recent reporting changes that require agencies to provide more comprehensive details about contract amendments and extensions.
Ongoing Scrutiny of Smaller Contracts
A separate proposal to have consultancy contracts worth over $2 million scrutinised by a parliamentary committee is scheduled to report back by mid-2026. The Department of Finance has opposed this initiative, put forward by Liberal Senator Richard Colbeck, arguing it could create perceptions of ministerial influence over procurement outcomes, contrary to established government procurement policy.
New Guidance for Government Agencies
The Department of Finance is currently collaborating with the government's in-house consulting arm to promote awareness of a newly developed "consulting playbook." This document aims to help agencies achieve better value for money by warning about common, potentially unethical tactics used by consulting firms to inflate fees and secure ongoing work.
This comprehensive response demonstrates the government's cautious approach to reforming consultancy oversight while balancing legal considerations and maintaining established procurement principles. The ongoing scrutiny reflects broader concerns about transparency and accountability in government contracting following high-profile scandals that have shaken public confidence in the consulting sector.
