Australia Extends Ban On Kpmg Federal Contracts Until 2027

CANBERRA — The Australian government has extended a ban on awarding contracts to KPMG until March 2027, after an independent review found the professional services firm still needed to prove it had meaningfully reformed after allegations it misused confidential client information to bid for work.

The extension will be a significant financial hit to the firm, which earned 207.1 million Australian dollars, or 9.5% of its total revenue, from Commonwealth work in the 2025-26 financial year.

The review, conducted by former senior public servant Ian Watt for the Department of Finance, found KPMG had taken positive initial steps to change its culture, but needed to prove a sustained focus on reforms.

The whistleblower allegations raised against KPMG included a claim the firm had used commercially sensitive information from real estate group, Lendlease, to bid for other private sector work.

After Labor Sen. Deborah O’Neill used parliamentary privilege to publicly raise the claims, Finance told more than 100 federal government agencies to stop awarding new work to the firm from June 16.

While the allegations relate to the firm’s conduct with private sector clients, Watt’s review found the conduct would have breached Commonwealth standards for how suppliers behave.

The current ban has relied upon KPMG agreeing not to bid for work, but Watt recommended the Labor government update its own code of conduct to include a formal option to restrict or prohibit suppliers from bidding for work.

The department has also agreed to reinstate the current “no bid” arrangement in the future if KPMG’s progress in implementing changes “materially stalls.”

“Overall, the review considers that KPMG should not be treated as permanently unsuitable for Commonwealth work, but nor should confidence be restored on the strength of assurances and encouraging early signs alone,” Watt found.

The firm will now be required to report back to Finance quarterly about its progress on implementing recommendations made by several reviews. The arrangement will stay in place for the next three years, or until all recommendations have been implemented.

Australian Securities and Investment Commission chair Sarah Court told the Walkley ING Business Lunch on Thursday the regulator has "multiple lines of inquiry in relation to the KPMG allegations, and we'll have more to say about those when we're able to."

Court said ASIC will seek more powers to crack down on the big four audit firms through law reform after a consultation being conducted by Treasury, warning of a "gaping regulatory hole in relation to audit firms."

"The current framework is directed largely at individual auditors and individual audit engagements, it doesn't equip us to address poor practices at the firm level, and what that means is much of the conduct, or at least some of the content, alleged is likely to fall outside our remit."

Despite the ban, KPMG has still been awarded at least $24.2 million worth of work since Jun. 16.

This is because agencies are still allowed to extend or amend existing contracts with the firm, which it has relied heavily on until now.

Finance’s own modelling for the period April 1 to Aug. 31 suggested KPMG still lost out on $61.3 million in revenue due to the ban.