KPMG hit with de facto ban on new government contracts

Embattled consulting group KPMG has effectively been banned from new federal government work while the Department of Finance reviews its suitability as a contractor.

A Department of Finance spokesperson said KPMG Australia has agreed to its request that the firm will not bid for any new Commonwealth work until 30 September 2026. The move follows the consulting giant’s whistleblower scandal, which showed KPMG executives were allegedly accessing and sharing sensitive information for financial gain.

“Between 16 June and 30 September 2026, KPMG will temporarily cease new contract engagements with Australian government entities subject to the Commonwealth Procurement Rules (CPR), with non-CPR covered entities recommended to adopt a consistent approach,” the spokesperson said.

“During this timeframe, Finance will commission an independent review of KPMG’s governance, culture, ethics and integrity frameworks. Further details regarding the review will be made available in due course.”

The review’s findings are expected to be shared with state governments, which are also reassessing their relationships with KPMG.

Last month, during Senate estimates, Finance Department officials said they had told KPMG Australia it could be banned from bidding for contracts after the firm had repeatedly failed to notify officials about wide-ranging allegations of client data misuse.

The partial ban shows KPMG may be heading down the same path as its rival PwC, which was forced to spin off its once-lucrative government business for just $1 as it faced a ban on receiving work from the federal government over allegations it had used confidential information on government tax plans to help recruit new clients.

PwC’s revenue has dropped by more than a billion dollars since that scandal erupted in 2023, and it has shed thousands of staff.

Last week, Greens senator Barbara Pocock revealed that KPMG currently holds 297 active federal government contracts worth $653 million.

“The government must review all current contracts and ban KPMG from any future contracts until they’ve been properly investigated,” she 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 and alleging that confidential client data had been shared and potentially used to win new business with other clients.

“There are clear allegations here of profoundly unprofessional and unethical behaviour,” she said at the time.

Last month, some of the allegations were substantiated, and the revelations triggered the resignations of CEO Andrew Yates and audit boss Julian McPherson.

KMPG said an initial internal investigation, which did not substantiate the allegations raised by the whistleblower, had not been conducted with the “necessary rigour required”.

Just weeks earlier, the firm refused to give the complainant whistleblower protections and said that “based on the evidence identified to date, the allegations have not been substantiated”.

This Friday, a parliamentary joint committee (PJC) chaired by O’Neill will publicly interrogate how some of Australia’s biggest corporate names, and regulators, were kept unaware of the scandal for two years after the complaints were first made.

This includes former NSW premier and Cricket Australia chairman Mike Baird – who helped instigate one of the external investigations into the allegations during his time on the KPMG board – as well as current and former executives of the consulting firm.

KPMG already faces the loss of its audit business with LendLease over the scandal. The property giant will put its audit business out to tender for the first time since the 1950s after KPMG auditors accessed sensitive boardroom documents that they were explicitly forbidden to access.

While it was “not appropriate to make a change in auditors this close to financial year-end, we will be reviewing our audit services following the completion” of the annual results report, a Lendlease spokesperson said last week.

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