Public service racks up $500 million consultancy bill in eight months

Nearly 2000 consultancy contracts have been entered into with government agencies since the financial year started to last Friday, reaching a total of $513 million, data published on the government's tender site shows.

Public Service Minister Ben Morton defended the reliance on consultants, adding overall public service expenditure had dropped to 5.7 per cent and would decrease further over the next two years.

But the opposition is demanding the government offer an explanation to justify how the large sum was used to serve the national interest.

Global accounting firms KPMG, Ernst & Young and Deloitte each have pocketed around $20 million in contracts across major departments, including Defence, Health and Infrastructure.

PricewaterhouseCoopers has entered into more than 80 contracts with the government, earning them $63 million.

The Department of Agriculture, Water and the Environment has 29 contracts with the big four firms equalling $27 million.

The department had signed the most amount of consultancy contracts since July last year, reaching 236 contracts valued at nearly $75 million.

The Defence and Health departments had together both signed more than 400 contracts, totalling $144 million and $54 million, respectively.

The figures show the federal government is on track to spend its largest consultancy bill ever, which could surpass the $725 million spent on nearly 3000 contracts during the 2020-21 financial year.

Labor's public service spokesperson Senator Katy Gallagher said a lack of transparency over each agency's reasons for entering into contracts, and what they were getting for them, meant it was tough to know whether the millions were being well-spent.

"With over half-a-billion dollars racked up in consultancy spending in just the first eight months of this financial year and a cost breakdown showing that daily spend has almost tripled since the change of government in 2013, the Morrison-Joyce government are on track to deliver the biggest consultancy bill on record," she said.

"For many of these contracts, details about what they're for, what the outputs are and why departments can't undertake the work themselves are being kept secret - making it virtually impossible to establish value for money.

"Australians deserve to know that their hard-earned taxpayer dollars are being used prudently and it is simply ludicrous if the government genuinely thinks handing over half-a-billion dollars to consultancy firms in just eight months is spending in the national interest."

READ MORE:

But Mr Morton said the APS had actually decreased the overall costs of government administration despite consultancy fees increasing.

The expenditure had decreased from 8.5 per cent in 2007-08 when former prime minister Kevin Rudd formed government to 5.7 per cent in 2020-21, he said.

He said it was projected to fall further to 5.3 per cent in two years.

"I'm extremely proud of the way the APS continues to serve the needs of Australians, particularly during the COVID-19 crisis," he said.

"At times, the APS requires flexibility and access to specialist expertise to respond to changing needs in our economy and communities."

Senator Gallagher on Wednesday said a Labor win at the election would see an "eroded" public service reshaped.

The Canberra senator said it would dust off David Thodey's landmark review into the public service and work to remove the average staffing level cap, audit the usage of labour hire across the sector, commit to improving job security by limiting fixed-term contracts and address pay gap inequalities between agencies.

"The job of reversing the brain drain must start by valuing, respecting and investing in the APS's biggest asset - its people," she said.

"The APS should be a place which attracts the best and brightest minds from around the country and then retains them with exciting opportunities and clear career paths."

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: