Labor questions $1.2b ‘blowout’ on consultancy contracts

By Shannon Jenkins

Friday March 13, 2020


The Commonwealth spent almost $1.2 billion on contracts with eight major consulting firms in 2018-19, according to the national auditor-general.

In his latest information report on procurement activity in the Australian Public Sector, auditor-general Grant Hehir found the government spent $64.5b in 2018-19 through the procurement website AusTender.

Over the course of the decade to 2018–19, the government spent more than $490 billion on procurement contracts.

Contracts marked as consultancy spending cost $647 million in 2018-19, Hehir’s analysis of AusTender found. Despite this, contracts with the largest providers of external consulting services cost almost $1.2b last financial year — almost three times the cost at the start of the decade.

The $1.2 billion was shared between eight companies — KPMG, PwC, Deloitte, EY, McKinsey, GHD, AECOM and Clayton Utz — with KPMG pocketing the largest amount.

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On Thursday, Labor Senator Katy Gallagher and MP Julian Hill said the ANAO report confirmed a “huge cost blowout in spending on consultancy contracts to outsource government work” despite the government having slashed 19,000 jobs from the public service over the past seven years.

“There are real questions to answer about whether this increase in expensive consultants and contractors actually delivers value for taxpayers’ funds, especially when at the same time the capability and resources in the public sector is diminishing,” they said, noting that the auditor-general had identified serious issues with contracting two years ago.

“This report brings on a severe case of deja-vu because it seems that the Liberal/National Government has learnt nothing from their previous failures in contracting out and over use of consultants.

“It’s time this government valued the skill, capability and commitment of Australian public servants and resourced it appropriately.”

Gallagher and Hill said the matter should be examined in a public inquiry by the Joint Committee of Public Accounts and Audit.

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