Chapter 3Potential privilege matters
Background
3.1As noted in chapter 2, the committee questioned government departments and agencies about the nature and number of contracts that departments and agencies currently hold with the accounting, audit, and consulting firm PwC. The committee was particularly interested in how agencies assured themselves of the integrity of those contracts.
3.2The committee's interest in these matters was piqued by two recent events.
3.3First, the 23 January 2023 announcement by the Tax Practitioners Board (TPB) of its decision to deregister Mr Peter Collins, a former PwC tax partner, for integrity breaches.
3.4Second, on 2 May 2023, as part of the Senate Estimates process, the Senate Economics Legislation Committee published an answer to a question on notice received from the TPB, which included 144 pages of redacted PwC emails.
3.5This evidence revealed several PwC personnel beyond Mr Collins were aware of, and potentially involved in, the misuse of the confidential information that MrCollins had obtained through consultations with Treasury.
3.6The committee's week-long examination of the 2023–24 Budget Estimates began on Monday 22 May 2023.
3.7Then, on 24 May 2023 the Secretary to the Treasury, Dr Steven Kennedy PSM, released a statement referring the PwC matter to the Australian Federal Police (AFP) for a possible criminal investigation. The statement read:
PwC Australia's former head of international tax, Mr Peter Collins, improperly used confidential Commonwealth information.
The emails that the Tax Practitioners Board tabled in Parliament on 2May2023 highlighted the significant extent of the unauthorised disclosure of confidential Commonwealth information and the wide range of individuals within PwC who were directly and indirectly privy to the confidential information.
In light of these recent revelations and the seriousness of this misconduct, the Treasury has referred the matter to the Australian Federal Police to consider commencement of a criminal investigation.
3.8On Friday, 26 May 2023 Senator Barbara Pocock sought leave to table a list purporting to contain the names of PwC partners and staff 'involved' in the breach of confidential information.
3.9Given that Senate Standing Order 26(2) provides that a legislation committee conducting Senate estimates hear evidence in public session, a committee decision to receive a document during proceedings on estimates necessitates the publication of that document.
3.10Accordingly, the committee suspended the hearing to deliberate in private. The committee resolved to seek written advice from the Clerk of the Senate and defer a decision on whether to receive and publish the list until it had the opportunity to consider the Clerk's advice on the potential adverse impacts of tabling the list of names.
Advice from the Clerk of the Senate
3.11By way of context, the Clerk noted in his advice that the events involving the reported misuse of confidential government information by partners at PwC are of significant public interest, not least in the context of the accountability role of estimates committees.
3.12The Clerk further noted:
The matter was the subject of multiple lines of inquiry across estimates hearings last week. Relevantly, committees heard that Treasury had referred the matter to the Australian Federal Police (AFP), which has commenced a criminal investigation into alleged misuse of confidential government information.
3.13The Clerk also noted that even though estimates is not primarily intended as a forum for committee members to provide evidence, there is a well-established practice of senators tabling documents that provide a foundation for a particular line of questions.
3.14The Clerk also emphasised that 'it is clearly within the power of a committee hearing estimates to receive and publish the information, subject only to a determination (by the chair, in the first instance) that the document is relevant to the matter before the committee'. The Clerk then stated, 'there is no doubt that the information was relevant to the matters before the legislation committee last Friday, and I expect that it will be relevant to matters to be examined during further estimates hearings this week'.
3.15The Clerk also noted that the restriction on hearing evidence in public session does not apply to committees meeting in other configurations. For example, the Finance and Public Administration (FPA) References Committee could receive and examine the document in confidence as part of its inquiry into Consultancy Services.
3.16Finally, the Clerk observed that even if the FPA Legislation Committee declined to receive the document, there would be nothing to prevent a senator reading from the document during the committee's proceedings (or during the proceedings of other committees in which it was relevant) or publishing the information it contains as part of a written question on notice.
3.17In his advice, the Clerk set out several matters the committee may wish to consider in relation to the list. This included the competing public interests involved, the adverse evidence provisions in Privilege Resolution 1(11), and the intersection between committee proceedings and legal proceedings.
3.18With respect to the competing public interests, as noted above, the Clerk had stated that the events involving the reported misuse of confidential government information by partners at PwC are of significant public interest. That said, the Clerk observed that committee members may consider it useful to have regard to the principles identified in Odgers' Australian Senate Practice (Odgers) in relation to relevant public interest grounds. The ground most immediately relevant involves possible prejudice to law enforcement investigations. Odgers says:
For this ground to be invoked it should be established that there are investigations in progress by a law enforcement agency, such as the police, and the provision of the information sought could interfere with those investigations.
3.19Next, the Clerk drew attention to the adverse evidence provisions in Privilege Resolution 1(11). Odgers notes:
Evidence which reflects adversely on another person, including a person who is not a witness, must be made known to that person and reasonable opportunity to respond given. The committee must consider whether to hear the evidence, publish it, and seek a response to it from another person.
3.20The Clerk observed that the rationale for the adverse evidence requirement is found in natural justice and that:
The committee will need to consider whether evidence identifying a person as being involved in the matter amounts to adverse evidence and, if so, will need to apply the provisions identified above. This will particularly be the case where the extent of a person's involvement is unclear to the committee.
3.21In relation to the intersection between committee proceedings and legal proceedings, the Clerk drew from Odgers to note that:
Committees may…indirectly cause difficulties in legal proceedings by generating evidence which, because of parliamentary privilege, cannot be used in any substantive way in the legal proceedings. For example, if a party to legal proceedings makes statements before a committee relevant to those proceedings, the other party may claim that the inability to examine those statements leads to unfairness in the proceedings, perhaps even justifying their termination. Particularly in criminal proceedings, there may be a danger of defendants deliberately placing material before a parliamentary committee in the hope of aborting or disrupting the court proceedings. Committees should therefore be wary of taking evidence relevant to legal proceedings.
3.22However, with respect to the issue of creating documents that would be unable to be used in court proceedings, the Clerk pointed out that the Senate Privileges Committee noted in its 67th report:
…that concern principally arises when primary documents are put before the parliament which do not exist in any other form.
It is difficult to see how that would apply in the case of a list of names that is presumably derived from some external source.
3.23In sum, the Clerk observed:
In essence, it is a matter for the committee to determine, in all the circumstances, whether to receive and publish the list; a decision that should be informed by committee members' assessment of the competing public interests involved.
3.24The committee thanks the Clerk of the Senate for his timely provision of advice and notes that the advice was drawn upon by other Legislative Standing Committees in the second week of budget estimates.
3.25The committee notes the FPA References Committee pursued these matters at a public hearing on 7 June 2023 as part of its inquiry into the management and assurance of integrity by consulting services. That committee subsequently published a first report on 21 June 2023 titled PwC: A Calculated Breach of Trust.
Senator Louise Pratt
Chair