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Turnbull government spending blowout on consultants and contractors

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Finance Minister Mathias Cormann has attacked the tens of thousands of protesters who turned out to demand justice for Indigenous Australians. Photo: AAP
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Labor has blasted the Turnbull government’s ballooning spending on consultants and contractors, soaring to more than $500 million in the last financial year.

AusTender data shows management consultants were paid close to $536 million in the past year, up from around $396 million in 2013, when the size of the federal bureaucracy peaked under the Labor government with 167,000 public service employees.

The ABC reported the big four financial services firms – KPMG, PriceWaterhouseCoopers, Ernst & Young and Deloitte – have alone won close to half-a-billion dollars in consultancy work over four years.

The amount paid to consultants is now inching close to $700 million a year, according to the ABC’s analysis of the data.

Leo Dobes, a retired senior public servant and associate professor at the Australian National University told the ABC there were not enough skilled economists left in the public service.

“There’s a woeful lack of ability and knowledge in that area,” Professor Dobes said.

“If you don’t have specialised skills and you use a consultant, how can you know you’re getting value for money?”

An analysis of the government’s procurement site by The Australian suggested $9.7 billion was spent on “management and business professionals and administrative services”, which included labour hire, external contractors, rent and legal advice in the past year, .

Finance Minister Mathias Cormann hit out at the report, claiming the “false and misleading” analysis massively overstated government spending by rolling multi-year contracts into one.

Labor finance spokesman Jim Chalmers said in many cases, the outsourced work could be done by public servants, were it not for staffing cuts and hiring caps.

“When you look more specifically at the money that is being spent on labour hire, that is a multiple of what it was under Labor,” he told reporters in Brisbane on Friday.

“When you look at the money spent on lobbying and branding and marketing and project management and risk management and all of these sorts of individual types of spending, you will see that there have been really substantial blow-outs on Mathias Cormann’s watch.”

However, Senator Cormann said the overall cost of federal government administration, including the use of contractors, had dropped significantly under the coalition and was projected to fall further.

– with AAP

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