KPMG hit with de facto ban on new government contracts
Embattled consultancy group KPMG is effectively banned from new federal government work, while the Treasury Department is reviewing its suitability as a contractor.
A Department of Finance spokesman said KPMG Australia had agreed to the firm’s request not to bid for any new Commonwealth work until 30 September 2026. The move follows the consultancy giant’s whistleblowing scandal, which saw KPMG executives allegedly accessing and sharing sensitive information for financial gain.
“Between 16 June and 30 September 2026, KPMG will temporarily suspend new contract agreements with Australian government entities subject to the Commonwealth Procurement Rules (CPR) and entities not covered by the CPR are advised to adopt a consistent approach,” the spokesperson said.
“During this period, Finance will commission an independent review of KPMG’s governance, culture, ethics and integrity frameworks. Further details of the review will be disclosed in due course.”
The findings of the review are expected to be shared with state governments, which are also re-evaluating their relationships with KPMG.
Last month, during Senate estimates, Department of Finance officials told KPMG Australia they had told KPMG Australia the firm could be banned from bidding on contracts after it repeatedly failed to notify authorities about wide-ranging allegations of misuse of customer data.
The partial ban suggests KPMG may be on the same path as rival PwC, which was forced to spin off its once-lucrative government business for just $1 as it faced a ban on taking business from the federal government over allegations it used confidential information about the government’s tax plans to win new clients.
PwC’s revenue has fallen by more than a billion dollars since the scandal broke in 2023, laying off thousands of employees.
Last week, Greens Senator Barbara Pocock revealed that KPMG currently has 297 active federal government contracts worth $653 million.
“The government should review all existing contracts and bar KPMG from future contracts until it has been properly investigated,” he said.
The scandal first came to light in March, when Labor senator Deborah O’Neill gave a speech in the Senate detailing the whistleblower allegations for the first time, claiming confidential customer data was being shared and potentially used to win new business with other customers.
“There are clear allegations here of deeply unprofessional and unethical behavior,” he said at the time.
Some of the allegations were confirmed last month and the revelations triggered the resignations of chief executive Andrew Yates and audit boss Julian McPherson.
KMPG said the initial internal investigation, which did not substantiate the allegations made by the whistleblower, was not conducted “with due diligence.”
Just a few weeks ago, the firm refused to provide protection to the complaining whistleblower, saying “the allegations are not substantiated based on the evidence identified to date.”
This Friday, a parliamentary joint committee (PJC) chaired by O’Neill will publicly question how some of Australia’s biggest corporate names and regulators were kept unaware of the scandal for two years after complaints were first made.
They include former NSW premier and Cricket Australia chairman Mike Baird, who helped launch one of the external investigations into the allegations during his time on KPMG’s board, as well as current and former directors of the consultancy firm.
KPMG is already in danger of losing its audit business with LendLease due to the scandal. The property giant will put its audit work out to tender for the first time since the 1950s after KPMG auditors gained access to sensitive board documents they were expressly barred from accessing.
A Lendlease spokesman said last week that “it is not appropriate to make changes to auditors so close to the end of the financial year, but we will review our audit services following the completion of the annual results report.”
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Colin Kruger is senior business correspondent for the Sydney Morning Herald and The Age newspapers.Connect via email.
