Australia's Big Four Consultancies Face Potential Cap and Split Under Regulatory Review

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Size of big four consultancy firms could be capped under crackdown

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By Courtney Gould

Changes to the regulation of accounting, auditing and consulting firms have been flagged by the government in the wake of the recent PwC tax leaks saga, and the more recent scandal at KPMG.

A Treasury option paper, released by Assistant Treasurer Daniel Mulino, floated potentially asking account firms to split off lucrative consulting services from their audit functions and face greater scrutiny and penalties for legal breaches.

Speaking with ABC's Radio National Breakfast, Mulino said the behaviour by some of the big four firms "simply isn't good enough".

"There have been a number of instances of opportunistic behaviour, of breaches of trust, of confidential information being used in ways that is highly inappropriate. So, it is clear to me that we need to look at strengthening arrangements," he said.

The Labor frontbencher says the government could also consider capping the number of the partners in a firm from around 1000 to 400 to make the organisations smaller.

"These firms have grown very substantially, and that was accommodated by current regulatory settings. That is one of the settings that we will look at: whether that should be brought down to be more in line with other professional services," he says.

The big four refers to consultancy firms KPMG, Deloitte, PYC, and Ernst and Young.

Albanese says it's 'alarming' EY contractors had access to banking data

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By Courtney Gould

Anthony Albanese has declined to weigh in after two Ernst and Young employees were sacked and one charged with accessing the prime minister's personal banking data.

The man charged was on a secondment from EY to the Commonwealth Bank when he allegedly accessed the PM's account. A second man was also charged. The pair appeared in a Sydney court on Tuesday.

"It's before the courts, and I'm not about to go into the detail of that. It's appropriate charges have been laid," he says.

Albanese, however, describes it as a "serious issue".

"Accessing anyone's privacy, any Australian's privacy, is alarming, let alone someone from a contractor who's not an employee of Commonwealth Bank being able to access that information," he says.

Albanese doesn't think Treasury got it wrong on house prices

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By Courtney Gould

Prime Minister Anthony Albanese isn't concerned the government's housing tax changes will have a bigger impact than initially expected amid a cooling in the housing market.

The national median house price fell by 0.4 per cent in June, the largest month-on-month drop since 2022.

Albanese won't say whether he thinks a drop in prices is a good thing, but he tells ABC News Breakfast it's "great news" that investors aren't outbidding first home buyers at auctions.

The PM is, perhaps unsurprisingly, sticking by Treasury modelling that house prices will continue to grow, albeit at a slower rate, due to the scaling back of the capital gains tax discount and negative gearing.

Asked if he thinks Treasury may have got it wrong, Albanese responds: "No, it's not."

"Treasury forecasts aren't week by week, they're serious forecasts done based upon modelling and a range of other economic modelling showing exactly the same thing," he says.

"You don't assess things like property on a day–to–day basis. What you do is assess what will happen, and Treasury has done that. As a result of these changes, there will be an increase in the value of houses. It will be slightly less, 2 per cent to be precise, than it would have been otherwise."

Coalition accuses government of 'crashing' economy

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By Courtney Gould

Shadow Treasurer Tim Wilson is placing the blame for a drop in house prices on the government.

Speaking with Sky News, Wilson accuses Treasurer Jim Chalmers of having "crashed the confidence of the Australian economy" with his budget.

Wilson also says that despite the government's argument that scaling back the capital gains tax discount and negative gearing will help young people, that isn't the case.

"I'm told that banks are saying there's not a lot of debt being issued to young people trying to buy a home," he says.

The Liberal frontbencher adds that he thinks house prices will "eventually" recover, but only because migration and housing targets are not in line.

"The government is, according to its own budget documents, building 35,000 fewer homes while they're overshooting their migration target. So, there'll eventually be a recovery," he says.

'A bit befuddling': Butler on speculation he's next in line to lead Labor

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By Courtney Gould

Circling back to Mark Butler's interview on ABC's News Breakfast for a moment.

There's been a lot of chatter in recent months about whether the South Australian MP could be anointed as Anthony Albanese's successor when he decides to retire.

Butler is a senior member of Labor's left faction and is one of the PM's key allies.

But he says he has "no idea" why his name keeps being thrown around as a potential future leader.

"It's all a bit befuddling," he said.

"We're only a year into a term where our prime minister, Anthony Albanese, won a really significant victory with a really big agenda that we're all working together to deliver in incredibly tough times.

"Our job as a team that has the privilege of governing this country is to work together under a leader in Anthony Albanese that I feel privileged to support."

What's new from today?

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By Courtney Gould

It's the start of a new financial year, so you know what that means: a bunch of new measures will start rolling out.

From today, the government says more than 14 million Australians will get a tax cut of up to $268 dollars.

Paid parental leave expands from 24 weeks to a full six months, while major supermarkets such as Coles and Woolworths are now subject to new laws tackling price gouging.

The three-month halving of the fuel excise has come to an end, with the discount dropping to 16 cents per litre as the Heavy Vehicle Road User Charge rises to 16 cents per litre.

Both measures are expected to taper off completely in August.

Cooling house prices not due to budget but 'cyclical market': O'Neil

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By Courtney Gould

Housing Minister Clare O'Neil was also grilled about the latest monthly house price data.

Property data firm Cotality reports national home values fell 0.4 per cent in June — the biggest monthly decline since December 2022. Sydney and Melbourne led the downturn.

O'Neil stuck pretty close to the Labor lines when questioned by Seven this morning, also reiterating that house prices will continue to grow over the medium term.

"This is a cyclical market, and the main thing that drives movement in house prices from month to month and year to year is what goes on with interest rates," she said.

She said the housing tax changes included in the budget (restricting negative gearing to newly built homes and replacing the 50 per cent capital gains discount with an inflation-indexed model) were about levelling the playing field in the market.

"The Treasury modelling shows us the impact of the government's tax changes will have a modest affordability effect on the market," she says.

'Prices will continue to grow': Butler 'confident' in Treasury modelling

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By Courtney Gould

Health Minister Mark Butler has again backed the modelling underpinning the government's housing tax package, despite a drop in house prices.

According to property data firm Cotality, dwelling values fell 0.4 per cent nationally in June.

Butler told ABC's News Breakfast that it was normal for house prices to "jump around a little bit", but he didn't think that was a result of changes in the budget.

Rather, a softening in prices and auction clearance rates was due to interest rate rises, and the "biggest hit" the Iran war caused to consumer confidence had a greater impact.

The Labor frontbencher said he was "very confident" in Treasury's modelling. The modelling included in the budget suggests house prices will continue to rise, albeit at a slower rate.

"They've thought about it very carefully. The history of house prices in Australia is one of growth ... and that doesn't mean there won't be a week here or a week there that you get particular numbers," he said.

"But we're very confident in Treasury's forecasts. House prices, house values for existing owners, will continue to grow.

"They'll just grow a little bit more softly for a period than otherwise would have happened."

Housing market weakened further in June

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By Lin Lin

The biggest monthly decline in home values in more than three years has been recorded as the housing market slowdown that began in Sydney and Melbourne spreads across the country.

According to property data firm Cotality, dwelling values fell 0.4 per cent nationally in June.

Sydney led the decline, falling by 1.2 per cent, while Melbourne values dropped 1 per cent.

The once-booming markets of Brisbane and Perth are still rising, but at a much slower pace. Adelaide was flat, suggesting momentum is waning in almost every capital city.

Read more at the link below.