November 10 2023

A recent Guardian article revealed serious problems with privatizing the inspection of long-term care facilities in Australia. Many of the inspection reports prepared by the 4 consulting firms were rejected because they failed to meet the standards. The 4 consulting firms had been hired when two-thirds of the inspections of long-term care facilities were privatized.

There were serious problems with the reports, even though the 4 consulting firms that received work — KPMG, SAI Global, RSM and HDAA — were paid over $40 million for the work.

3 consulting firms involved operate in Canada

3 of the firms involved in privatizing the inspection of long-term care facilities in Australia also operate in Canada. 2 have them have done work involving long-term care in Canada. In other words, if a provincial government attempted to privatize the inspection of long-term care facilities, it is entirely possible that the same companies that did a poor job in Australia would be bidding for and potentially receiving contracts.

Potential for conflicts of interest

Another problem that emerged with privatizing the inspection of long-term care facilities was the potential for conflicts of interest. In testimony before an Australian senate inquiry into the use of consultants, Michael Tull, the Assistant National Secretary of the Community and Public Sector Union, pointed out that “KPMG, as well as providing people to do the assessment of aged-care residential facilities, also has a business line providing advice to the providers of those facilities.”

Potential conflicts of interest due to large consulting firms doing work for both governments and for businesses that governments are supposed to be regulating are all too common. And serious problems can result.

Earlier this year, it emerged that a senior partner in PwC, one of the big 4 accounting and consulting firms, had passed on confidential information to his colleagues. He had received this information as a result of work done for the Australian government on legislation to reduce tax dodging by multinational corporations. As the Australian Broadcasting Corporation reported, PwC then used this inside information to get new clients and make money.