By Poppy Johnston and Tess Ikonomou in Canberra

Major consultancy firm PwC could face harsher punishment as the federal government signals further action to clamp down on unethical behaviour. 

The government is considering new steps to restore trust with the “Big Four” consultancy firm following a high-profile tax scandal.

Asked if the government should ban contracts with PwC until the firm took stronger action to clean up its act, Treasurer Jim Chalmers said there would be more to say on the government’s response to “inexcusable” behaviour.

“Particularly when you consider that corporate Australia, for the right reasons, wants to be consulted on changes that impact them,” he told ABC radio on Monday.

“And I want to do that, too… part of the character of this government is consultation.”

The government has already taken steps to strengthen the Tax Practitioners Board to stamp out unethical behaviour.

The Greens have been urging the government to ban contracts with PwC and its senators have used parliamentary hearings to grill government departments about their work with the beleaguered firm.

Nick McKim and David Shoebridge asked Home Affairs officials about six contracts the department has with PwC, valued at $8.13 million.

Chief operating officer Justine Saunders told a budget estimates hearing the department had received emails from the consultant assuring it that no confidentiality agreements had been breached.

The tax scandal has also revived interest in the public sector’s reliance on Big Four consultancies.

In another hearing, Greens senator Barbara Pocock asked officials from the Department of Prime Minister and Cabinet if a ban on contracting PwC was under consideration.

David Williamson, a deputy secretary from the department, said a ban had not been imposed.

“However, one of the criteria… relates to ethical behaviour and certainly we would bring that to bear in any contemplation of engaging PwC,” he said.

Cabinet minister Penny Wong said the policy issues of confidentiality and procurement practices were in question over the breach.

New research from the Centre for Public Integrity found the volume of contracts with KPMG, PwC, EY and Deloitte had surged 400 per cent over 10 years.

In 2021/22, the public service contracted $1.4 billion with the four firms.

Executive director Han Aulby said the public sector had been hollowed out while the Big Four made millions from taxpayer contracts.

The treasurer said there had been a “troubling explosion” in labour hire and contracting at the same time as the public service had been reduced.

The centre’s research also found consultancies had donated a combined $4.2 billion to the major parties between 2012/13 and 2021/22.

In January, a former PwC partner was caught sharing confidential federal government tax policy information to drum up business.

The partner was found sharing the Treasury intel on measures to improve tax laws, including rules to stop multinationals from avoiding tax by shifting profits from Australia to tax and secrecy havens.

The chief executive officer has since stepped down and the firm has embarked on an investigation into its governance, culture and accountability led by former Telstra boss Ziggy Switkowski.