In a desperate effort to rehabilitate itself after the tax leak scandal, PwC has resorted to a shocking tactic — telling the truth.
Not about who within the firm was also involved in sharing confidential information about multinational taxation, or the rotten culture that enabled it and the ensuing cover-up, but about political donations, which PwC has now abandoned.
“Although we have always taken the utmost care to ensure our political donations do not create any real or perceived conflicts of interest,” acting CEO Kristin Stubbins is reported to have told PwC partners yesterday, “we recognise that doing away with political donations is the best way of ensuring the highest standards of governance.”
As we reported a month ago, PwC is the biggest political donor of the big four audit/consulting firms, having given more than $2 million to both sides of politics, though mainly the Coalition, in the past decade.
PwC’s donations ban includes de facto donations such as payments to attend, or sponsor or host, political fundraising events — which are even more iniquitous than straight donations, as they are primarily aimed at securing access to policymakers.
As Crikey (alone) has argued, in obtaining access to policymakers, the goal of a firm such as PwC, which has myriad corporate clients, isn’t merely to obtain information from and wield influence over policymakers in its own interests, but in those of its other clients.
The multi-client nature of a firm such as PwC makes it inherently conflicted in any dealings it has with government. This conflict of interest can’t simply be managed away — it’s an integral part of the business model of a firm of that nature. So, as Stubbins said, “doing away with political donations is the best way of ensuring the highest standards of governance”.
It also just so happens to suit PwC financially, given the firm will no longer be bidding for government consulting work, with the hiving off of public sector consulting to “I’d buy that for a dollar” Scyne Advisory. But it will continue to do government auditing work.
PwC’s unexpected truth-telling about the essentially conflicted nature of big four political contributions leaves the remaining three in an uncomfortable position. KPMG, Deloitte and Ernst & Young (EY) may be smaller donors than PwC was, but the same problem of integrated conflict of interest applies to any access they have to policymakers, especially behind closed doors, as political fundraisers always are. Clearly they’re not as committed to “the highest standards of governance” as PwC, following its Damascene conversion, seems to be.
The missing parties in this picture, literally, are Labor and the Coalition. If they too were committed to the highest standards of governance, they would refuse to accept contributions from the big four and any other firms that operate on a similar model of having multiple corporate clients while engaging in policy work for governments.
Better yet, they would remove the whole problem of access to policymakers by ending the practice of selling it to donors, a process by which they give us a two-speed democracy.
Finest example of making a virtue of necessity seen in quite while.
That’s not going to happen in any foreseeable future because Labor and the Coalition each exist to sell their collection of parliamentary votes to those who pay. That is their business model. It is the basis for all the rest. They only pay attention to ordinary voters because they need to win seats before they can sell their parliamentary or, better still — much more profitable — ministerial influence, to their real customers, those who fund them. It’s not so much a two-speed democracy as democracy for sale to the wealthy few.
Not surprising, it happens in the UK and USA (not not Canada or NZ to the same extent).
What astounds me is how cheap are pollies are, a few million in donations generates billions in earnings.
Totally why ive voted labor for the last time unless Albanese shows em the door and if he allows this corruption and moral inturpitude to continue not only will we all be holding road signs in indentured work the neo lib devils will sell the lot for a buck and a plum role holding the corporate masters’ whip
Agree in part. Plebs get the vote, business leaders get access.
The issue, surely, is that political parties cannot operate on tithes from the faithful. They need business for their core funding.
Without fixing that issue, the PwC decision is almost bad news. I’m not aware that ЧВК Вагнер is currently donating to Aus political parties, but I’m not confident any of the main parties would say no.
nihalism is tge death of democracy so cynics becareful of giving the scum a free ride – why just roll over ? That will never win the real class war – forge the bread and circus we have to save the economy ? For who ?
The issue is that they’ve adapted to living off their wealthy patrons and cannot imagine what else to do. But if by some miracle that option was taken away, and the major parties sole source of funding was membership dues (limted to reasonable amount to avoid abuse of the system), or else membership dues and small voluntary contributions from private citizens, the parties would suddenly discover they could manage on that alone, because they would have to. And at the same time they would discover it was in their interests to offer policies the public want, and to respond to public concerns, and our national politics would be transformed beyond recognition.
The reason major parties depend mostly on wealthy donors is, in part, because its much easier for them this way and they are lazy.
Yeah, nah. That’s a very hypothetical miracle, like Morrison turning out to be a good man.
It’s a miracle that could happen in a few hours if the major parties wanted to do it; but that’s something like saying addicts only have to stop indulging in their addiction. Yet it would be very easy to do if they had the will. Compared to most of the things governments struggle with it’s not difficult or complicated. You said the parties ‘need business for their core funding’, but they really don’t. Just about all other parties get by without, or with very little (because they have to, but even so). The major parties have chosen to rely on business (and trade unions in Labor’s case), rather than anything else, because that’s the way they like it.
I’d like to know why the Labor party is a major player in four pokies clubs in Canberra, and the Catholic Church is a major player in NSW, I have asked my local member why this is so? I am still holding my breath.
I don’t know what is worse, funding from the misery of gambling or from insider donations. Just goes to prove the high bar we accept for our government.
Labor and the Coalition refusing to take donations from consulting firms? O, fainting spell! Hand me the smelling salts. You’ll be saying that they can’t take money from mining firms, or fossil fuel next!
Of course PwC will no longer make political donations. They have announced the will not seek government contracts so why pay? A decision dressed up to look like it was made on ethical grounds rather than the fact they had nothing to gain by making donations. But will the spun off entity make the donations instead?
Cold turkey… and the parties get withdrawal symptoms.
Not mentioned here is the in-kind support offered to Opposition parties. With thin staffing, Oppositions welcome the selfless offerings from consultancy companies who of course would never expect a quid pro quo if the Opposition were to be elected.