Allegations KPMG fleeced taxpayers by billing the Defence department for hours never worked must be investigated, the chair of an inquiry into consultants says.
The ABC is reporting two whistleblowers, one from KPMG and another from Defence, have revealed a lack of scrutiny which led to the consulting giant being able to inflate invoices and charge the federal government for work not done.
KPMG reportedly charged the department $1.8 billion over the past decade.
Another of the big four firms, PwC, has been embroiled in a scandal over its use of confidential government information to help clients avoid tax.
"There clearly has to be investigations ... by regulators and also by the department," corporations committee chair Deborah O'Neill told ABC radio on Monday.
"When you are rewarded time and time again for pushing the envelope for a grossly profit-driven incentive at the cost of any integrity and professionalism, you've got the recipe for what's been described."
Senator O'Neill said the coalition government hollowed out the public service over the past 10 years.
"When you replace all of those who are actually able to talk frankly and fearlessly to government ... you've got a big problem in the sector," she said.
Public Service Minister Katy Gallagher said there was a "heap of work to be done" by the government in re-balancing the public service away from relying on contractors.
"It's worse than I thought," she told parliament.
"I do believe there is more we can do in this area to make sure we are getting value for money."
Nationals leader David Littleproud said there were existing mechanisms, such as the auditor-general, to investigate the claims.
"It's important the Australian people get confidence that Australian taxpayers' dollars has been spent wisely," he told reporters in Canberra.
"If there's evidence that points towards that, then that should be aired."
A whistleblower who previously worked for the department told the ABC personal connections helped KPMG snag a $14 million contract for a defence logistics project, despite it being the most expensive option.
The firm said in a statement to the ABC it could not find evidence to support claims of improper billing of Defence.
It said there was a formal process of extensive checks and balances involving both parties before invoices were issued or paid.
Independent Kooyong MP Monique Ryan introduced legislation to the lower house on Monday to extend the register of lobbyists to include "registered professional lobbyists acting on behalf of third parties, services firms and lobbyists acting on behalf of businesses and industry bodies".
She also wants the National Anti-Corruption Commission to be able to investigate breaches of the lobbying code of conduct.
