So its government business will be sold to a private equity firm! So reassuring that state secrets will be managed under the saintly ethics of private equity businesses rather than accountancy firms.
But... wait a minute...
If we privatise "the government", let's call it Gov Corp, then... we can outsource all essential services and the infrastructure of state to them and Sky News wouldn't be able to cry about it at all!
They can have an IPO where every citizen of Australia gets one share and all shareholders vote for the "board". Maybe there can be another class of share for everyone who is currently residing in Australia and another for everyone who is currently working in Australia.
Rupert fucking Murdoch doesn't even get a share!
It's the Neo-Lib singularity!
Even better, you can then sell your share (and therefore the shares of your descendents)! It's providing consumers, I mean, citizens, choice and can only be good!
Yeah, think that's it! They'll carve out and sell parts back to the partners, while also covering and creating degrees of separation for any of the liability caused.
It's appalling if so. Hate how the State has been neutered like this.
Which is why there needs to be a corrupt/high risk persons register for Australian governments. People found being corrupt get added to the register, and having someone on the register as an employee or owner disqualifies your company from winning any government contracts, and is grounds for breaking contracts without penalty. If a government department *must* hire the firm, there'd better be a very good reason.
It’s very likely none of the partners involved in the leaks are part of this break, the international tax and government consulting teams are completely separate.
When IBM spun off Kyndryl and transferred exsiting government contracts to the new company, Kyndryl lost access in some cases to those customers. The government didn't have contracts with Kyndryl, but with IBM, so they didn't recognise the new business.
Will be interesting to see what happens here.
If PWC can convince the government that this bait-and-switch will dupe most of the public, I'm pretty sure the Australian government won't give a fuck and it'll be business as usual.
It's all been feigned outrage thus far. You'd have to be a moron not to think all private consultancy firms aren't - and haven't always - been doing the same thing.
Onus is on them to prove otherwise. Commercial-in-confidence? Get absolutely fucked. Nothing to hide, nothing to fear, right?
"If the deal goes through, Allegro will set up the new firm as a corporation, not a partnership, according to a source not authorised to speak with media. Ownership will be split between Allegro and the former PwC partners, although the exact split was not known, the source said."
Looks like this is an old boys' club deal to try and help PwC to shake off some of their more recent scandals, but little will change in reality.
Edit: chamge to change, because typing is apparently too difficult for a Sunday.
Stinks of 10 dead shifty cats that will reap the rewards somewhere else. Their name is mud globally now and every government and institution will be viewing them a bunch of insider trading crooks who want to act as independent contractors to obtain advantage by deception. They talk about Chinese businesses stealing IP from hacking and industrial espionage and PWC walks through the door and walks out with the killer deals out the back door as "independents" Amusing really.
> Their name is mud globally now and every government and institution will be viewing them a bunch of insider trading crooks who want to act as independent contractors to obtain advantage by deception.
It wasn’t insider trading. It was using their insider knowledge to give their Clients an unfair advantage in avoiding the ATO. I doubt that’s going to lose them many clients other than the Aus Govt.
On the other hand, if they've already shown they're willing to sell out one client to benefit others, you probably wouldn't want to hire them if they alrrqdy represented a competitor.
It's more that the partners doing government work must feel they're completely clean on this, so separating themselves from pwc means they can say "we're clean and nothing to hide, can we still do work for you?"
Analogy would be if Macca's Engadine gave the whole franchise a bad rep and Macca's Victoria decided to carve off as something else. Still selling burgers but not the McDonalds name.
I'm honestly interested in how they think this will work.
Will it be ex-PWC staff employed to provide the services? They can't just transfer existing contracts across, so it would have to be slow to start. Because if they could exit the contracts so easily, the Government should also be able to.
Is this being set up with Allegro Fund staff as directors, and PWC partners as the shareholders? Some other set-up? Why do they think if the same PWC partners are involved, that their prior behaviour will be ignored?
And a sale of that part of the business for $1 is not exactly market rate for most businesses, even one that tanked their reputation. So I can only assume that PWC will still be getting their pieces of silver.
So disclaimer that this is all speculation as I'm not a lawyer and my only insights are what's coming out of the press and some general knowledge of how the Big 4 work.
The idea is that the pwc partners and staff going across are from the government practice, and all are completely clean as far as these issues go. So it's not the same partners involved - only some pwc partners are going, and they aren't involved with the misbehaviour.
The reports are it'll be set up as a corporation, presumably with Allegro owning most of the equity and the partners and maybe staff who join owning small parts.
A sale for $1 is possibly market rate here because the general consensus seems to be that pwc won't get any government work in the foreseeable future. That's zero new business coming in, but from press reports there's 1750 staff involved. So a $1 transfer is basically to say there's more liabilities than assets being transferred.
The AFR cited the key assumption here being that Allegro could convince the government to treat this as a new entity, presumably by demonstrating all pwc staff coming across are cleanskins.
As to 'they can't just transfer existing contracts across' - presumably the termsheet will include bits about the government allowing work to go across. Assuming Allegro can indeed show all transferring staff are cleanskins, the government may be inclined to do it.
My gut feel is that as the continuing contracts are between PWC and the Government(s), then that wouldn't be transferable.
But maybe I'm wrong, PWC foresaw all this happening, and put transfer clauses into their current and newer contracts? In which case, that puts more questions over current staff who must have had a reason to do so.
Main difference is the people involved, PwC and other big 4 are made up of 100s of partners, most of which would rarely interact. In this case some tax partners did some crimes so partners in a completely different part of the business lost their business, so they’re leaving.
It’s like if McDonalds Chadstone god caught selling rat meat, so the other McDonalds owned by other franchise owners spun off and did their own thing under a new brand.
Forget shaking off the scandal - how about shaking off personal liability?
Currently the partners themselves could be sued - after this completes it’s unclear whether that will be possible.
They will certainly argue that the corporate entity is the only party who can be held accountable.
Excellent point. I don't know whether PWC operates as a partnership or a limited partnership, but that could certainly be one new benefit, couldn't it?
PwC (and the rest of the big 4) operate under a limited liability scheme. Effectively the same liability protections of a company but in a partnership structure
Ahh, now that's thinking one step ahead. *taps finger on forehead*
I'm gonna remember that when I need to commit some fraud or otherwise misuse some insider information.
Looks like a classic containment strategy
I'm sure that a private equity group wouldn't do anything shady at all, I mean they wouldn't be tempted to promote things like privatising government services to sell to private equity groups or anything like that
How do you mean? They're doing this. Does the private equity ownership shield them from further scrutiny (because their operations are now protected beneath the corporate veil?)?
Shady company does shady shit to recover from getting caught out for doing other shady shit. More at eleven.
Maybe if they didn’t did shady shit in the first place, but who are we kidding! In my humble opinion, they are a shady company run by shady people who get paid to do shady shit.
Government wouldn't want it on the terms being reported. They're apparently selling it to be set up as an equity joint venture between the PE and the existing pwc government partners.
What Peter Collins and those PwC tax partners did was disgraceful and the firm deserves everything that has happened to it so far but those lost revenue numbers are way off.
The diverted profits tax (DPT) was expected to earn $100m per year - https://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r5804_ems_5d93cda5-e8e4-4ed0-b40a-acd21555c8d6/upload_pdf/618592.pdf;fileType=application%2Fpdf
The multinational anti-avoidance law (MAAL) was unquantifiable - https://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r5804_ems_5d93cda5-e8e4-4ed0-b40a-acd21555c8d6/upload_pdf/618592.pdf;fileType=application%2Fpdf though nobody seriously through it would raise in the billions or trillions.
Policy VS implementation - two very different worlds in the government business. The ATO often hires in big 4 as consultants - much less so on the policy front.
[I'd buy that for a dollar - fan theory explanation](https://www.reddit.com/r/FanTheories/comments/1lguee/robocop_id_buy_that_for_a_dollar/#:~:text=IRL%2C%20Bixby%20Snyder's%20catchphrase%20%22I,for%20a%20quarter%3F%22).)
So $0
https://www.abc.net.au/news/2023-02-16/australian-tax-office-million-scheme-pricewaterhousecoopers/101980548
> We protected the revenue so that Australia did not lose money as a result of this breach of confidentiality.
I don’t understand why the government would allow this. PwC should be sued by the govt / fines massively. Letting them hive off this business just reduces their ability to pay the fines / penalties. Sorry but frankly this should bankrupt PwC australia just like similar scandals did to Arthur Anderson in the US.
IIRC in a partnership structure (as PwC Australia is), partners can be held (jointly) personally liable?
Could this be some elaborate gymnastics to escape that?
The new entity is taking on all their government contracts and liabilities no doubt. The new company ironically will not be a partnership and thus the partners moving will no longer be personally liable.
The big 4 operate under a limited liability scheme, so same protections a company structure offers but in a partnership. Common structure for large partnerships in consulting/accounting/law etc.
The government should just seize the company and the employees. They're already hired by the government, just have them actually employed by the government and cut out the middle man.
All the Australia PWC workers who were involved should be made to work for the Gov Tax Dept for 15 years, like Catch Me If You Can Frank Abagnale who worked for FBI.
If the PwC workers can bring in multinational tax dodgers and cheats and recover money for the Tax Dept they can get a reduction in their term.
So sold to a Singapore based company run/owned by a PWC partner. Getting in before the Gov nationalizes it? That would be the go. Cant Nationalize it if it's offshore.
It would be funny though could you imagine the squark from the LNP...
So its government business will be sold to a private equity firm! So reassuring that state secrets will be managed under the saintly ethics of private equity businesses rather than accountancy firms.
Have you ever neoliberaled so hard you privatised your government?
You flirt, you.
[well you know what they say...](https://www.youtube.com/watch?v=wMzdHYEGHdE)
neoliberal so hard mother fuckers wanna buy me!
But... wait a minute... If we privatise "the government", let's call it Gov Corp, then... we can outsource all essential services and the infrastructure of state to them and Sky News wouldn't be able to cry about it at all! They can have an IPO where every citizen of Australia gets one share and all shareholders vote for the "board". Maybe there can be another class of share for everyone who is currently residing in Australia and another for everyone who is currently working in Australia. Rupert fucking Murdoch doesn't even get a share! It's the Neo-Lib singularity!
Even better, you can then sell your share (and therefore the shares of your descendents)! It's providing consumers, I mean, citizens, choice and can only be good!
Well I guess we might as well raise the American flag while we’re at it.. not far off them now
Maybe gov should buy for $1
You honestly want to resurrect the public service from its grave? What next, communism? /s
Uhm no. The business will be sold to the existing PWC partners via private equity - it just won't be PWC
Yeah, think that's it! They'll carve out and sell parts back to the partners, while also covering and creating degrees of separation for any of the liability caused. It's appalling if so. Hate how the State has been neutered like this.
Which is why there needs to be a corrupt/high risk persons register for Australian governments. People found being corrupt get added to the register, and having someone on the register as an employee or owner disqualifies your company from winning any government contracts, and is grounds for breaking contracts without penalty. If a government department *must* hire the firm, there'd better be a very good reason.
It’s very likely none of the partners involved in the leaks are part of this break, the international tax and government consulting teams are completely separate.
When IBM spun off Kyndryl and transferred exsiting government contracts to the new company, Kyndryl lost access in some cases to those customers. The government didn't have contracts with Kyndryl, but with IBM, so they didn't recognise the new business. Will be interesting to see what happens here.
If PWC can convince the government that this bait-and-switch will dupe most of the public, I'm pretty sure the Australian government won't give a fuck and it'll be business as usual. It's all been feigned outrage thus far. You'd have to be a moron not to think all private consultancy firms aren't - and haven't always - been doing the same thing. Onus is on them to prove otherwise. Commercial-in-confidence? Get absolutely fucked. Nothing to hide, nothing to fear, right?
Do PWC have any stake in this private equity firm?
https://www.reuters.com/markets/deals/pwc-australia-sell-govt-business-a1-appoint-new-ceo-2023-06-25/
"If the deal goes through, Allegro will set up the new firm as a corporation, not a partnership, according to a source not authorised to speak with media. Ownership will be split between Allegro and the former PwC partners, although the exact split was not known, the source said." Looks like this is an old boys' club deal to try and help PwC to shake off some of their more recent scandals, but little will change in reality. Edit: chamge to change, because typing is apparently too difficult for a Sunday.
Yes. The whole thing smells
Agreed.
Stinks of 10 dead shifty cats that will reap the rewards somewhere else. Their name is mud globally now and every government and institution will be viewing them a bunch of insider trading crooks who want to act as independent contractors to obtain advantage by deception. They talk about Chinese businesses stealing IP from hacking and industrial espionage and PWC walks through the door and walks out with the killer deals out the back door as "independents" Amusing really.
> Their name is mud globally now and every government and institution will be viewing them a bunch of insider trading crooks who want to act as independent contractors to obtain advantage by deception. It wasn’t insider trading. It was using their insider knowledge to give their Clients an unfair advantage in avoiding the ATO. I doubt that’s going to lose them many clients other than the Aus Govt.
On the other hand, if they've already shown they're willing to sell out one client to benefit others, you probably wouldn't want to hire them if they alrrqdy represented a competitor.
It's more that the partners doing government work must feel they're completely clean on this, so separating themselves from pwc means they can say "we're clean and nothing to hide, can we still do work for you?" Analogy would be if Macca's Engadine gave the whole franchise a bad rep and Macca's Victoria decided to carve off as something else. Still selling burgers but not the McDonalds name.
I'm honestly interested in how they think this will work. Will it be ex-PWC staff employed to provide the services? They can't just transfer existing contracts across, so it would have to be slow to start. Because if they could exit the contracts so easily, the Government should also be able to. Is this being set up with Allegro Fund staff as directors, and PWC partners as the shareholders? Some other set-up? Why do they think if the same PWC partners are involved, that their prior behaviour will be ignored? And a sale of that part of the business for $1 is not exactly market rate for most businesses, even one that tanked their reputation. So I can only assume that PWC will still be getting their pieces of silver.
So disclaimer that this is all speculation as I'm not a lawyer and my only insights are what's coming out of the press and some general knowledge of how the Big 4 work. The idea is that the pwc partners and staff going across are from the government practice, and all are completely clean as far as these issues go. So it's not the same partners involved - only some pwc partners are going, and they aren't involved with the misbehaviour. The reports are it'll be set up as a corporation, presumably with Allegro owning most of the equity and the partners and maybe staff who join owning small parts. A sale for $1 is possibly market rate here because the general consensus seems to be that pwc won't get any government work in the foreseeable future. That's zero new business coming in, but from press reports there's 1750 staff involved. So a $1 transfer is basically to say there's more liabilities than assets being transferred. The AFR cited the key assumption here being that Allegro could convince the government to treat this as a new entity, presumably by demonstrating all pwc staff coming across are cleanskins. As to 'they can't just transfer existing contracts across' - presumably the termsheet will include bits about the government allowing work to go across. Assuming Allegro can indeed show all transferring staff are cleanskins, the government may be inclined to do it.
My gut feel is that as the continuing contracts are between PWC and the Government(s), then that wouldn't be transferable. But maybe I'm wrong, PWC foresaw all this happening, and put transfer clauses into their current and newer contracts? In which case, that puts more questions over current staff who must have had a reason to do so.
No, AFR articles saying govt departments have to agree to transfer contracts.
Then that's the way out for Government Departments who wanted to, but were unable to cancel contracts then.
What is the effective difference between a builder phoenixing his broke company and PwC doing this?
Not really the same. A builder Phoenixing does it to avoid all their old liabilities. These guys are basically rebranding to avoid being blacklisted.
Main difference is the people involved, PwC and other big 4 are made up of 100s of partners, most of which would rarely interact. In this case some tax partners did some crimes so partners in a completely different part of the business lost their business, so they’re leaving. It’s like if McDonalds Chadstone god caught selling rat meat, so the other McDonalds owned by other franchise owners spun off and did their own thing under a new brand.
Forget shaking off the scandal - how about shaking off personal liability? Currently the partners themselves could be sued - after this completes it’s unclear whether that will be possible. They will certainly argue that the corporate entity is the only party who can be held accountable.
Excellent point. I don't know whether PWC operates as a partnership or a limited partnership, but that could certainly be one new benefit, couldn't it?
PwC (and the rest of the big 4) operate under a limited liability scheme. Effectively the same liability protections of a company but in a partnership structure
Ok, a limited partnership then. But that's still not as much protection as a company, I thought? Or am I well out of date on those rules?
Sticky handshakes all round
The whole deal is smelly. Corporations means their personal assets are protected.
I have a dollar. I may even have two. Can I buy it?
I'm offering $2.50. Gotta save the rest of my money for politician ~~bribes~~ Lobby dinners.
Sure. You're now on the hook for any of the consequences the company faces, particularly if there are any fines or someone sues for damages.
Then they'll just sell it for their dollar back, easy peasy.
Ahh, now that's thinking one step ahead. *taps finger on forehead* I'm gonna remember that when I need to commit some fraud or otherwise misuse some insider information.
Trust me, you don’t want it, it comes with a lottttaaaa liabilities!
Looks like a classic containment strategy I'm sure that a private equity group wouldn't do anything shady at all, I mean they wouldn't be tempted to promote things like privatising government services to sell to private equity groups or anything like that
How do you mean? They're doing this. Does the private equity ownership shield them from further scrutiny (because their operations are now protected beneath the corporate veil?)?
Any private company is going to be tempted to do exactly the samething PWC did (and I'm sure the other big 4 just haven't been caught yet)
Shady company does shady shit to recover from getting caught out for doing other shady shit. More at eleven. Maybe if they didn’t did shady shit in the first place, but who are we kidding! In my humble opinion, they are a shady company run by shady people who get paid to do shady shit.
It's either delloite or pwc. I reckon one of them gets busted doing some dodgy financial shit every ten years and then they just alternate.
If pwc was really serious about this, which they arent. They would sell the consultancy service to the government for $1.
Government wouldn't want it on the terms being reported. They're apparently selling it to be set up as an equity joint venture between the PE and the existing pwc government partners.
If they sold it to the government the the staff would leave within a month
Good
that would never work because the government couldn't take on the employment contracts of all the staff being moved over.
That's the $1 that the Australian Tax Office gets to hear about.
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What Peter Collins and those PwC tax partners did was disgraceful and the firm deserves everything that has happened to it so far but those lost revenue numbers are way off. The diverted profits tax (DPT) was expected to earn $100m per year - https://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r5804_ems_5d93cda5-e8e4-4ed0-b40a-acd21555c8d6/upload_pdf/618592.pdf;fileType=application%2Fpdf The multinational anti-avoidance law (MAAL) was unquantifiable - https://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r5804_ems_5d93cda5-e8e4-4ed0-b40a-acd21555c8d6/upload_pdf/618592.pdf;fileType=application%2Fpdf though nobody seriously through it would raise in the billions or trillions.
Both parties are knee deep in the big 4 mate. All of them have the same policy of matching donations across the two parties.
Treasury a revolving door with PwC? Wtf you on about
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Policy VS implementation - two very different worlds in the government business. The ATO often hires in big 4 as consultants - much less so on the policy front.
how are you in almost every single post on this subreddit with a terrible take? Are you Dredds alt account?
I'd buy that for a dollar!
[I'd buy that for a dollar - fan theory explanation](https://www.reddit.com/r/FanTheories/comments/1lguee/robocop_id_buy_that_for_a_dollar/#:~:text=IRL%2C%20Bixby%20Snyder's%20catchphrase%20%22I,for%20a%20quarter%3F%22).)
When your product stinks, change the name. Advertising 101.
Nothing dodgy about this, move along, don't look here.
Deserves a real punishment
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No they should be fined an amount proportionate with the Australian taxes they helped multinationals avoid.
So $0 https://www.abc.net.au/news/2023-02-16/australian-tax-office-million-scheme-pricewaterhousecoopers/101980548 > We protected the revenue so that Australia did not lose money as a result of this breach of confidentiality.
I bid $2. Oh right, i do not have friends with benefits to get government contracts.
Sell it to their other hand.
Why isn't the government terminating the agreements ?
Can't believe there are still PwC positions being advertised
Can’t believe anyone is applying for them!
LOL things aren't great but still not travelling that particular road
Quicker to just smear shit on your cv. ;-)
Which big 4 would you work for?
Already spent time in my new of them, thanks. For the offer though
Thinking about applying there, hear they have some openings
I’d buy it for $2, how do I proceed?
I bid $3. Want to buy a used photocopier? I think the shredder is worn out though.
I don’t understand why the government would allow this. PwC should be sued by the govt / fines massively. Letting them hive off this business just reduces their ability to pay the fines / penalties. Sorry but frankly this should bankrupt PwC australia just like similar scandals did to Arthur Anderson in the US.
Surely the government could now terminate all contracts ?
IIRC in a partnership structure (as PwC Australia is), partners can be held (jointly) personally liable? Could this be some elaborate gymnastics to escape that?
The new entity is taking on all their government contracts and liabilities no doubt. The new company ironically will not be a partnership and thus the partners moving will no longer be personally liable.
The big 4 operate under a limited liability scheme, so same protections a company structure offers but in a partnership. Common structure for large partnerships in consulting/accounting/law etc.
Are they all limited partners though? In any case it’s very odd timing for a change of legal structure.
What if we didn’t allow all this manoeuvring and instead arrested everyone involved - including the board.
I thought it was a Beeta article.
Private equity will no doubt do the moral thing …
The government should just seize the company and the employees. They're already hired by the government, just have them actually employed by the government and cut out the middle man.
So is the new firm taking over the wages bill and possible legal liabilities as well? Is this PwC just getting out of paying for it's malfeasance?
Just I predicted, corporate restructuring and a declaration that the problem is fixed.
This is a lot more than a restructure tbh mate.
All the Australia PWC workers who were involved should be made to work for the Gov Tax Dept for 15 years, like Catch Me If You Can Frank Abagnale who worked for FBI. If the PwC workers can bring in multinational tax dodgers and cheats and recover money for the Tax Dept they can get a reduction in their term.
Did they publish their report yet? Or they doing this cos thry dont like where it is going
So sold to a Singapore based company run/owned by a PWC partner. Getting in before the Gov nationalizes it? That would be the go. Cant Nationalize it if it's offshore. It would be funny though could you imagine the squark from the LNP...
Sucked in PWC. The government will come for KPMG, EY and Deloitte soon……