KPMG slapped with de facto ban from new federal government contracts after whistleblower scandal

KPMG has effectively been banned from winning new federal government contracts after the Department of Finance asked the consulting giant to step aside while it reviews the firm's suitability.

Between June 16 and September 30, 2026, KPMG won't bid for any new Commonwealth work covered by the Procurement Rules. The Department of Finance will commission an independent review of KPMG's governance, culture, ethics and integrity frameworks. State governments are also watching closely.

The move follows a whistleblower scandal that erupted in March when Labor Senator Deborah O'Neill detailed allegations in Parliament. She said confidential client data had been shared and potentially used to win new business. Last month, some of those allegations were substantiated.

KPMG's CEO Andrew Yates and audit boss Julian McPherson resigned after the findings. The firm admitted its initial internal investigation — which found nothing — wasn't done with the "necessary rigour required."

Greens Senator Barbara Pocock revealed last week that KPMG still holds 297 active federal contracts worth $653 million. She called for a review of all current contracts and a ban on future work until a proper investigation is done.

"The government must review all current contracts and ban KPMG from any future contracts until they've been properly investigated," Pocock said.

This Friday, a parliamentary joint committee chaired by O'Neill will publicly question how some of Australia's biggest corporate names and regulators were kept in the dark for two years after the complaints were first made. Among those called to appear: former NSW premier and Cricket Australia chairman Mike Baird, who helped instigate an external investigation during his time on KPMG's board.

The partial ban echoes the fate of rival PwC, which was forced to spin off its government business for just $1 after a similar scandal over confidential tax plan information. PwC's revenue has dropped by more than a billion dollars since 2023, and it has shed thousands of staff.

KPMG is also losing business in the private sector. Property giant LendLease will put its audit work out to tender for the first time since the 1950s after KPMG auditors accessed sensitive boardroom documents they were explicitly told not to touch. A LendLease spokesperson said it wasn't appropriate to change auditors right now, but the company will review its audit services after the annual results.