Federal Treasurer Jim Chalmers says he is "furious" and "ropeable" at revelations a former partner at consulting firm PricewaterhouseCoopers (PwC) leaked confidential government briefings.
Earlier this week, the Tax Practitioners Board revealed it had suspended the licence of Peter-John Collins, a former tax partner at PwC, for two years for integrity breaches.
It found Mr Collins had taken part in confidential briefings with Treasury as it consulted on possible multinational tax changes, and had signed confidentiality acknowledgements on three separate occasions in 2013, 2016 and 2018.
He then shared some of that confidential information, including documents, with other staff within PwC.
The board found internal communications within PwC that suggested Mr Collins was aware that confidential information could be leveraged by the firm to market to new clients.
Mr Collins' tax agent registration has been terminated, and he is barred from re-applying for two years.
The board also took aim at PwC more broadly, criticising it for failing to properly manage conflicts of interest.
Questioned on the confidentiality breach, Mr Chalmers told reporters he was surprised and alarmed.
"[I'm] absolutely furious, absolutely ropeable about these revelations," he said.
"There is no consultation without trust, and we want to be able to consult in a meaningful way when changes to the tax system are in prospect. And the actions that we've seen alleged and reported cut across that.
"This is a shocking breach of trust, an appalling breach of trust."
PwC Australia chief executive Tom Seymour said the firm was working to prevent future integrity lapses.
"We're deeply disappointed that in this government consultation process we failed the high standards we set for ourselves as a firm," he said.
"We recognise and understand the need for our tax system to operate with integrity and deeply regret confidentiality in this matter was not maintained.
"We’ve taken action to protect against this happening again."
Changes flagged to protect integrity
The breaches occurred while the Coalition was in office, and the consultation related to multinational tax avoidance measures being taken in coordination with the OECD.
But Mr Chalmers said there would undoubtedly be ramifications for future government efforts to consult with industry as it put together policy proposals.
"As a government that wants to be consultative where we can, this puts that sort of consultation at risk," he said.
"And so it puts the quality of economic decision making and policy making at risk as well."
The treasurer said work was already underway looking at what could be done to strengthen confidentiality processes and prevent future leaks.
"I have asked Treasury, and I've written to the chair of the Board of Tax and to the head of the ATO, to ask for advice on any additional steps that we should be taking to protect the integrity of these important processes," he said.
"I see these processes as absolutely essential, and central, and I want to protect the integrity of these processes."
The Greens have called for a review of government use of the so-called "big four" consulting firms (PwC, Deloitte, KPMG and EY).
Senator Barbara Pocock said there were questions of trust to be answered.
"Sharing details of proposals to reign in tax avoidance with firms like these, whose employees then behave unethically, is like putting the fox in charge of the henhouse," she said.
"What confidence can taxpayers have that conflicts of interest like these are not widespread?".
Former assistant treasurer Michael Sukkar said he was pleased to see the action taken against Mr Collins and PwC, but stopped short of calling for broader sanctions against PwC.
"I am pleased that the former Coalition government took steps to strengthen the independence and role of the [Tax Practitioners Board], which has helped facilitate this action," he said.
"Sanctions administered by the TPB are rightly imposed against individual tax practitioners, as has occurred here."
