Audit reveals Government spends $10 billion on outsourcing

The government defended its use of consultants, saying that the total cost of government administration had fallen. Source: Pixabay

The Federal Government forked out nearly $10 billion last year on outsourcing activity, as government departments scrambled to fill gaps left by years of public service job cuts and hiring caps.

The Australian conducted an analysis of the government’s AusTender site, and found that federal departments and agencies spent $9.7 billion last year on “management and business professionals and administrative services”.

About $2.6 billion was spent on management advisory services, $2.26 billion on leasing and renting properties and buildings; $750 million on temporary personnel; and $498 million on project­ administration or planning.

According to the ABC, large accounting firms such as KPMG, PriceWaterhouseCoopers, Ernst & Young, Deloitte, have won close to half-a-billion dollars in consultancy work over the last four years.

The Australian’s audit revealed other big-ticket items including $315 million on technology and consultation services, $942 million on legal services and more than $126 million on marketing and distribution.

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Finance Minister Mathias Cormann defended the increasing use of consultants, saying that the total cost of government administration, including consultants and contractors, had fallen significantly under the Coalition.

“It helps to keep the cost of Commonwealth administration low by helping to avoid the ongoing costs which would be incurred with the recruitment of additional permanent public servants when the need for specialist skills or additional support is temporary or project-specific,” he said.

The opposition described the spending as wasteful, reinforcing Labor’s election pledge to limit the use of consultants in the public service.

“The Turnbull Government’s blunt public service headcount cap comes at the cost of building higher and rising consultancy and labour hire fees into the budget,” Shadow finance minister Jim Chalmers told the ABC.

“This is a very worrying and expensive development which the Turnbull Government has gone to great lengths to hide, refusing even basic requests to learn more about the problem.”

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