Big four consultancies, which get $1.5b in government contracts, donated $850k to Labor and Libs last year

The big four consulting firms donated just over $850,000 in total to the two major parties in the last financial year, and landed more than $1.5 billion in government contracts in the same time.

The recently released Australian Electoral Commission donations data revealed that PwC, KPMG, Ernst & Young and Deloitte made slightly more political donations in 2021-22, which included a federal election, compared with previous years.

They donated about $857,000 over the financial year, with the money split fairly evenly between Labor and the Coalition.

These same firms received contracts worth $1.5 billion in the same financial year. Labor has pledged to cut spending on consultancies and labour hire firms by $3.1 billion over four years, including $500 million this financial year.

Centre for International Corporate Tax Accountability and Research principal analyst Jason Ward said the new data raised questions.

“The significant political contributions and the role of the revolving door raise particular concerns about how and why the big four firms continue to rake in major government contracts despite the limited evidence of the value of their work,” Ward told Crikey. 

The Greens have raised questions over the political donations of these regularly used consulting firms, and called for further regulations.

“What confidence can Australians have in companies who make large donations to political parties and then receive major government contracts?” South Australian Greens Senator Barbara Pocock said.

PwC donated the most, chipping in about $245,000 in the financial year. Of this, $125,000 went to the Liberals and $120,000 to Labor. In this same timeframe, PwC landed federal government contracts worth $329 million.

While its overall donations in the financial year were relatively evenly split between both major parties, in the lead-up to the 2022 federal election PwC gave $42,800 to the Liberal Party and just $500 to Labor. PwC made a total income in Australia of $685 million in 2021-22, and paid $1.6 million in tax, according to ATO data. 

A PwC partner was recently caught sharing confidential documents obtained during Treasury consultations with other consultancy staff, who in turn handed these documents to corporate clients.

KPMG donated approximately $243,000 to the two major parties — $130,000 to the Liberals and $113,000 to Labor. In the last financial year, KPMG netted a total income of $204 million but did not pay any tax. In 2021-22, KPMG netted $505 million from federal government contracts and amendments.

US-based consulting multinational Deloitte donated $240,000: $150,000 to Liberal or National parties and $90,000 to Labor. In the same financial year, Deloitte was awarded contracts and contract extensions worth $384 million.

The size of their donations pale in comparison with the value of the contracts they won from the commonwealth in the same financial year.

In late September, PwC donated $7500 to the Liberal Party, just four days after it was awarded a $2.4 million contract with the Department of Finance for a “training program for parliamentary staff”. And the previous day it had won a $2.5 million deal with the Department of Health and Aged Care for the quality indicators program.

KPMG made a $32,500 donation to the Liberal Party at the end of July 2021, two weeks after it started work on a $3.1 million contract with Services Australia, and an $11.8 million contract with the Department of Defence for specialist contract help. 

Government procurement should be used to promote better transparency, Ward said: “Outsourcing to the big four is highly dubious in terms of value for taxpayers’ money and undermines public sector capacity and independence.

“Governments should not reward tax-dodging multinationals with any further contracts. With the big four, it is not just their own tax avoidance but the facilitation of tax dodging by multinational clients.”