KPMG faces three-month freeze on federal contracts amid whistleblower scandal

KPMG is facing a three-month freeze on new federal government contracts amid a worsening scandal over the treatment of a whistleblower, with the Greens now referring the beleaguered company to the national anti-corruption watchdog.

Finance Minister Katy Gallagher said the government was "very concerned" with allegations that KPMG misused confidential client information from a private company and mistreated a whistleblower.

The company has agreed with a request from the finance department not to bid for any new work for the Commonwealth until September 30, while an independent review of the KPMG is underway.

"There'll be a review into their engagement with Commonwealth contracts and in the meantime, they're stopping bidding for work," Senator Gallagher told the ABC.

The review is set to examine whether KPMG breached the standards expected of government suppliers and if taxpayers were charged for work which fell short of those benchmarks.

"We expect suppliers who earn the privilege of working for the public should have the highest ethical standards."

However, the pause does not include the 297 contracts KPMG currently holds with the federal government worth $653 million.

Watch dog referral amid 'slap on wrist'

The Greens have referred KPMG to the National Anti-Corruption Commission for allegations linked to a whistleblower who raised concerns in 2024.

The allegations were first aired by Labor senator Deborah O'Neill under parliamentary privilege in March.

Senator O'Niell said a whistleblower had raised concerns that KPMG used confidential information from construction giant Lendlease to pitch for and win audit contracts from other large firms.

Lendlease will put its external auditing contract worth $10 million annually out to tender next year after a 30-year relationship with KPMG.

Greens finance and public service spokesperson Barbara Pocock said the government had signed $24 million worth of contracts with KMPG since the Senator O'Neill aired the claims publicly.

Senator Pocock said the pause on new contracts "barely constitutes a slap on the wrist" and the government was too involved in contracts to act independently.

"Labor has rose coloured glasses for the Big 4 even when they behave unethically," Senator Pocock said in a statement.

Senator Pocock said the government had not learned after accounting firm PWC was found to have misused confidential government information to help multinational companies avoid tax.

The arm of the company which dealt with public contracts was sold off for a dollar in 2023, and PWC currently does not bid for any federal government contracts due to a non-compete clause.

"It is time to implement the recommendations of earlier inquiries: subject these massive partnerships to the same rules of tax, transparency and whistleblowing as other large entities through corporations law, separate the functions of consultancy from audit and regulate them properly."

More than 30 witnesses are expected to appear before a joint parliamentary committee into KPMG in Canberra on Friday.

Current and former KPMG staff expected to face questioning include chair Martin Sheppard, interim chief executive Stan Stavros, former chief executive Andrew Yates, former chief operating officer Eileen Hoggett and other former and current partners, including former NSW premier and former independent board member Mike Baird.