Election 2022: Labor to target consultancy spend in public sector

By Tom Ravlic

April 14, 2022

Katy Gallagher
Minister for the public service and finance Katy Gallagher gave three reasons for the introduction of the legislation. (AAP Image/Lukas Coch)

Another senior Labor figure has suggested consultancy hire in the public sector will be targeted should the ALP form government, saying it could cost billions of dollars to rebuild capacity within the Australian Public Service because it has lost critical skill sets.

Shadow finance minister Katy Gallagher said there would need to be a reinvestment of capacity in the public service because of the loss of expertise within the public service and the overreliance on outsourcing to consulting firms and individuals.

She said there are departments that appear to not have policy capability anymore and action needs to be taken to make sure “the public service can do the job that it was meant to do”.

“The government’s outsourcing [policy development] to the private sector. We do think there needs to be a re-balancing within the public sector, but we do think there’s absolutely a net save in terms of the money that’s been spent on labour hire and consultants in particular,” Gallagher told Sky News.

She said public sector policies will be released at a later stage in the campaign but a part of the focus will be the scaling back of outsourcing.

“We will be releasing that before the election … but we do think — I mean, this is an area I’ve been working on in relation to consultants, labour-hire, contractors across the public service. There’s no doubt it’s gone skyrocketing over the last few years,” Gallagher said.

Gallagher, a former chief minister of the ACT, also said that the national cabinet set up by prime minister Scott Morrison during the pandemic fractured the federal-state relations, whereas the Council of Australian Governments seemed to her to be a more collaborative and equal partnership given her experience with COAG in the past.

She said that there was a better way to secure the cooperation between the federal, state, and territory governments.

“I think it should be not too ambitious because it’s hard to get through some reforms. But you know, if you pick off a couple of areas where you want to work with the states and territories on improving things, I think there’s a real opportunity, you know, less division, more consensus and agreement about what needs to get done,” Gallagher said.

Last week, shadow treasurer Jim Chalmers told the National Press Club that a federal Labor government would look to employ more public servants while drastically cutting the reliance on consultants.

“There is an opportunity, I think, to have a good look at the spending that goes into that part of budget, and to work out whether we could do more with less,” Chalmers said.

“More in terms of capacity, less in terms of spending on contractors and consultants.”


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