The federal government released an options paper on June 30, 2026, aimed at improving the regulation of accounting, auditing, and consulting firms. Financial Services Minister Daniel Mulino announced the release.

This initiative follows revelations that KPMG staff leaked confidential client information. The leaked information originated from Lendlease and Optus and was provided to colleagues seeking audit contracts with Westpac, Dexus, and Telstra. At least three KPMG partners were involved in the unauthorized sharing of this confidential data.

Mulino commented on the conduct of large firms on June 30, 2026, stating the behavior "simply isn't good enough." He indicated that the government might consider measures such as capping the number of partners within firms to reduce their size. Additionally, Mulino said the government could compel companies to separate their auditing and non-auditing services or mandate a complete split of the entities.

Mulino discussed the government's efforts in a June 30, 2026, interview with ABC RN Breakfast. "Since I've come into this role, I've really tried to prioritise drawing together a lot of strands of work that were already in play. And especially now that we've seen what's happened with KPMG, we're now accelerating a lot of the government's work," Mulino said. When asked about the possibility of the government terminating existing contracts with KPMG, he responded, "I'm not aware of any specifics on that front."

Separately, house prices in Sydney and Melbourne experienced their largest one-month decline in values in three years on the same date.

Why It Matters

The release of this options paper by the Australian federal government signals a potential shift in the regulatory landscape for major accounting, auditing, and consulting firms. The move is a direct response to a data breach involving KPMG, which saw confidential client information improperly shared. Stricter regulation could lead to structural changes within these large professional services organizations, addressing concerns about firm size and potential conflicts of interest from auditing and non-auditing services being offered by the same entity.