Treasury considers reward system for whistleblowers

The government has opened consultation on a review of corporate whistleblowing laws in Australia to ensure they are working to effectively protect whistleblowers.

The consultation also considers financial incentives for whistleblowers. Currently the regime does not include financial incentives or rewards for whistleblowers as it relies on perceived moral and civic obligations.

"Overall, whistleblowing poses risks to psychological and physical health, finances, and job security, which may deter potential whistleblowers in coming forward," the consultation said.

However, Treasury also noted financial incentives may result in a larger number of low-value disclosures which would further tie up limited regulator resources.

Assistant treasurer Daniel Mulino said the review will investigate whether the current laws are working as intended, identify any ongoing concerns, and, where appropriate, recommend further improvement.

This comes on the back of KPMG Australia admitting to falling short in its treatment of a recent whistleblower and the investigation into the allegations.

As a result, KPMG chief executive Andrew Yates and chief operating officer Eileen Hoggett resigned from their positions, taking accountability for not meeting the firm's expectations, those of the whistleblower and the broader community.

A parliamentary investigation into the whistleblower allegations is currently being led by Senator Deborah O'Neill.

O'Neill has detailed some of the allegations against KPMG by the whistleblower including misappropriation of confidential Lendlease board papers which were used by KPMG to pursue major audit tenders including Westpac and Dexus. She also mentioned serious concerns regarding independence and integrity during the pursuit of the Macquarie audit contract.

"Whistleblowers play an important role in uncovering misconduct and wrongdoing in the tax and corporate sectors," Mulino said.

"They need protection to feel supported in coming forward on issues which may otherwise go undetected."

The terms of reference include consideration of whistleblowers' access to justice, and the effectiveness of the regimes in incentivising whistleblowing and disincentivising misconduct, Mulino added.

"Corporate, financial and tax crime can be challenging to detect, and exposing wrongdoing often comes at great personal and financial risk," Mulino said.

"A strong whistleblowing regime mitigates those risks with legal protections, while also promoting fair and competitive markets by exposing businesses that may be gaining an unfair advantage."