Big Four consultancy firms receive $640m a year to perform ‘day-to-day’ public service jobs

By Shannon Jenkins

Wednesday June 17, 2020


Labor MP Julian Hill has called for an inquiry into what he describes as “privatisation of Australia’s public service by stealth”.

Hill on Wednesday said federal departments and agencies have been using consultancy firms to perform “day-to-day duties” rather than for actual consulting, due to huge cuts to the Australian Public Service.

“New analysis by the Australian National Audit Office (ANAO) has found that the Big Four consultancy firms — Deloitte, Ernst & Young, KPMG and PwC — now collectively reap $800 million a year in government contracts,” he said in a statement.

“But only 20% of that figure is spent on actual consultancy contracts, meaning the Morrison government is paying top dollar to large consultancy firms to work as contractors doing the day-to-day work of public servants.”

According to those figures, the firms would be receiving $640m annually to handle tasks that could be performed by bureaucrats.

Hill argued the current government has cut nearly 18,000 jobs from the APS since coming into power, which has led to “privatisation of Australia’s public service by stealth”.

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The Thodey review of the APS, released last year, found that the widespread use of external contractors and consultants was a key factor behind the decline in the capability of the APS, Hill noted.

The review — which was initiated by Malcolm Turnbull — raised concerns about the relationship between a growing external workforce and declining in-house capability.

It noted that while it’s impossible to have in-house expertise for absolutely everything, the use of external capability must be “strategic and well-informed”, and the APS must ensure that “all arrangements lead to a transfer of knowledge to the APS”.

“The APS needs to find the right balance between retaining and developing core in-house capability and leveraging external capability to ensure a sustainable and efficient operating model for the decades ahead,” it stated.

“Ministers, through their actions, not just words, will need to reiterate that deep expertise is important. Agencies will need to maintain and invest in core in-house capabilities. Managers will need to cultivate deep expertise in target areas.”

Hill has called for a public inquiry to look into the use of consultants, contractors and labour-hire firms in the commonwealth, in order to improve transparency and increase public awareness.

Read more: The cult of the consultant

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