Call for $1 billion yearly federal consultancy spend to have greater public scrutiny

By Jackson Graham

Tuesday October 12, 2021

The Australia Institute estimates the annual cost of commonwealth consultants could instead employ 12,346 public servants.
The Australia Institute estimates the annual cost of commonwealth consultants could instead employ 12,346 public servants. (denisismagilov/Adobe)

The Australian senate should order all government consultancy reports and advice to be available for public scrutiny, says a think tank taking aim at the “hollowing out” of the APS and the soaring costs of contract spending. 

A new Australia Institute report also estimated the annual cost of commonwealth consultants — which has risen to $1.1 billion — could instead employ 12,346 public servants who would retain their expertise in the APS. 

Bill Browne, a senior researcher at the institute’s Democracy & Accountability Program, said the senate should force reports and advice by consultants to be tabled in parliament and become publicly available. 

“A continuing order in the senate for the production of consultancy reports and written advice would go a long way to ensuring that the work being carried out at considerable taxpayer expense is available for the scrutiny of the public,” Brown said. 

His report claims the use of consultants has risen with an ebb in public sector staffing due to workforce caps. There were about 20,000 fewer APS employees in 2019 compared with 2013, although numbers are now gradually rising again

A 2020 Australian National Audit Office report found the total contract values for consultants reached its lowest in 2013-14 but had “grown each year over the last five years”. 

The audit office found the cost of contracts shared among seven big consultancy firms soared from around $600 million in 2016-17 to more than $1.1 billion in 2017-18.  

Consultant GHD took home $301 million in 2017-18, while KPMG earned $270 million in commonwealth consultancy fees the following year. 

The auditor’s report also found the “need for specialised or professional skills” was the main reason for the majority of APS contract work in the past decade. 

Brown says the constraints on staff are forcing the public service to contract out. 

“When it uses consultants instead of permanent staff, the public service loses skills and experience at the end of the contract instead of retaining that expertise long-term,” Brown wrote in his report. 

The report notes that Australia’s consulting industry, inclusive of all sectors, is the fourth biggest in the world. 

Brown acknowledged that forcing the work of consultants to be public would not solve the underlying issues of reliance on non-APS staff but believes it “would be an improvement on the status quo”.

“It would depend on the executive engaging with the order in good faith, or the willingness of the senate to hold the government responsible for any failure to engage,” the report states.

“It also would not, in itself, resolve the over-reliance on consultancy contracts which are a symptom of the hollowing out of the public service.”


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