Labor’s promise to cut $6.4 billion in spending by reducing consultants’ contracts and outsourced service delivery is meaningless unless the Government commits to firm targets to cut spending across all departments and agencies, according to Greens spokesperson on Finance and the Public Sector, Senator Barbara Pocock.
While Labor claims to have already made savings of around $5 billion on external contracts, spending on consultants had only come down by $40 million in 2024 with the bulk of those savings coming from a reduction in external labour hire contracts.
Lines attributable to Senator Barbara Pocock:
“In the wake of the PwC scandal, Labor has convinced everyone that their crackdown on contracts with the Big 4 consulting firms has led to reduced spending on consultants, but it hasn’t. During their first year in office consulting contracts were cut by almost $100 million but in 2023-24 Labor’s total spend on consultants rose to just over $643 million, roughly $40 million less than the Morrison Government spent in 2021-22.
“All this talk about getting rid of consultants from the public service is just a smoke screen for business as usual. There has been a reduction in contracts going to the Big 4, PwC, KPMG, Deloitte and EY, but instead of bringing that work back into the public service, the Government has simply outsourced nearly all of it to smaller consulting firms.
“The Greens have argued relentlessly since the PwC scandal came to light that core government work should be done by public servants and while Labor has made bold statements about doing that, they have failed to make any real progress.
“I made some very clear recommendations following the two Parliamentary inquiries into the Government’s use of consultants, advocating targets for a phased reduction in spending on consultants across all departments and agencies. Why won’t Labor commit to the Greens policy of reducing spending on external consultants by 15% each year over five years?
“Leaving it up to each agency to set its own targets does not guarantee real immediate action. Government departments have become so reliant on the consulting industry that only mandated targets to reduce outsourcing will get the results needed to bring core work back into the public service. Peter Dutton’s promise to cut 41,000 jobs from the APS will inevitably lead to a consultants feast in a return to worst excesses of the Morrison era.
“Both major parties need to commit to building a strong public service with the capability to deliver the level and quality of service that Australians expect and deserve, without feathering the nests of private interests who routinely fail to provide value for money, are often riddled with conflicts of interest and who remain unaccountable to the ordinary Australians who pick up the tab for their over-priced services.”