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Treasurer Jim Chalmers has blocked a Senate inquiry from accessing communications between the Australian Tax Office and Australian Federal Police in 2019 about the decision not to launch a criminal probe into the PwC tax leak scandal.
A letter from Chalmers this week to the Senate inquiry into the consulting industry says that releasing the information could prejudice the AFP’s current criminal probe into the alleged misuse of confidential government information.
Treasurer Jim Chalmers says releasing correspondence between the ATO and AFP could prejudice the probe into PwC.Credit: Alex Ellinghausen
“Following consultations between Treasury, the Australian Tax Office and the Australian Federal Police about the documents in scope, I am advised that return of the documents could prejudice the ongoing police investigation into PwC. As such, I claim public interest immunity in respect of all of the documents in scope,” Chalmers wrote in the letter to the Senate president.
Chalmers declined to comment further, but has been scathing of PwC’s conduct. Treasury played a central role in referring the investigation to the federal police.
“People are understandably and justifiably angry,” the treasurer said in May, soon after the depth of the scandal was revealed.
Former PwC partner Peter Collins signed the first of a series of confidentiality agreements with Treasury in 2015 concerning plans to combat tax avoidance by multinationals such as Google. He leaked the information to PwC partners within months to help devise, and market, plans to the same companies being targeted by the proposed new laws.
Former PwC partner Peter Collins.
The Tax Office first contacted the AFP about PwC in March 2018, and after a year, the force determined it could not proceed with a criminal investigation. It was only this year that the Tax Practitioners Board revealed Collins had been banned for two years over the matter.
The federal police launched an investigation in May, following the release of emails to a Senate estimates committee that detailed the scale of the operation within PwC, to globally profit from the confidential information.
Last month, Greens senator Barbara Pocock instigated a Senate order requesting the production of all communications between the ATO and AFP relating to PwC, dating back to January 2016.
Pocock’s orders include a specific reference to all documents and correspondence relating to the decision that determined there was insufficient information to formally refer the tax leak matter to the AFP for investigation.
Pocock on Friday said Chalmers’ decision to refuse access to the correspondence continued the secrecy around events involving the ATO and PwC.
“This cone of silence approach is what we expect from PwC and the other big four firms, not from the Treasury. All we’re asking for is transparency,” Pocock said.
“The fact that the treasurer has claimed that this could prejudice the current police investigation raises even more questions. What could the correspondence between the ATO and the AFP show that could prejudice investigations?”
This week, PwC was forced to reveal to the NSW parliament that a review of its conduct by Ziggy Switkowski – which was triggered by the tax scandal – would not review staff conduct relating to the scandal.
Pocock said the terms of reference show PwC’s review was not what the firm promised in May when it appointed Switkowski to lead the review.
“One look at the terms of reference tells us that our fears of a cover-up when the inquiry was announced were absolutely justified,” Pocock said.
“This review is not even considering the tax leaks scandal or any past conduct of partners and employees at the firm.”
PwC’s past acting chief executive, Kristin Stubbins, previously said that a separate investigation would ensure there was accountability for those “top of house” who were running the firm as well as the executives directly involved in the scandal.
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