The Australia Institute has a growing body of research on the harms caused by the over-use of consulting firms by Australian governments. This submission summarises and expands on that research in the context of the inquiry Ethics and professional accountability: structural challenges in the audit, assurance and consulting industry by the Parliamentary Joint Committee on Corporations and Financial Services. While the research focuses on the relationship between governments and consulting firms, some of the findings will be applicable for consulting firms more generally, including their relationships with private clients.

The submission recommends clear standards, better monitoring and strong sanctions.

Types of conflicts of interest:

• Giving advice to government that favours private clients over the public interest
• Distorting advice so that it is favourable for the relevant minister or senior public servants rather than advising what is in the public interest, or even dropping reports that would be unfavourable for government ministers
• Acting for different arms of government on the same topic 
• Making political donations that may influence government tendering

Recommendations to manage problems with consultants:

• Banning political contributions from government contractors
• Implementing a clear and strict revolving door policy for public servants
• Considering banning auditors from doing other work for their clients
• Professional standards for economic consultants
• Monitoring by the Senate of the work consultants do for government
• Banning consultants from receiving further government work if they engage in misconduct