Public Service Minister Katy Gallagher has ordered agencies to end their over-reliance on consultants. Photo: Michelle Kroll.
As part of the Federal Government’s commitment to reducing the reliance on external labour, Public Service Minister Katy Gallagher said it would deliver another $1 billion of savings in the upcoming 2024-25 Budget.
The ACT Senator said this would help rebuild a fit-for-purpose public service that was resourced to deliver on services that had mostly been undertaken by consultants, contractors and labour hire in recent years.
Senator Gallagher said while the Liberals talked tough about capping public service numbers when they were in government, in reality they were spending billions outsourcing the work to keep the public service headcount artificially low.
“Two years into the public service rebuild, it’s no surprise that the Liberals are already drawing up plans to cut at least 10,000 public servant jobs and reduce services,” Senator Gallagher said.
“It is clear Peter Dutton wants to go back to the era of Robodebt and slash the services that Australians rely on.”
Since the Labor Government’s election, there are about 8700 roles now being performed by public servants, which include an additional 2400 conversions to be reported in the 2024-25 Budget.
Senator Gallagher said a second Audit of Employment would be undertaken to measure and track exactly how the public service was delivering on the government’s commitment to reduce its reliance on external labour.
The first Audit of Employment, in 2021-22, found the last government spent around $1 in every $4 on external labour. Compared with a similar period in this financial year, the current government said it had cut spending on consulting firms by $624 million.
After the 2022-23 October Budget’s delivery of $3 billion in savings from reduced spending on external labour, the upcoming Budget is now expected to bring a total of $4 billion in savings.
The government said it would allocate $625 million of this total across all public service agencies in 2027-28, along with an additional external labour levy of $375 million over four years from 2024-25.
During an ABC Insiders interview on Sunday (5 May), the ACT Senator was asked whether it was becoming harder to find savings in the budget.
“I think the first two budgets you saw us really lean in and find large amounts, billions of dollars in savings, as we go through, and as the pressures increase on the Budget it is harder,” Senator Gallagher said.
“But we think this is an area, as we rebalance the public service and we employ permanent public servants into those roles that were perhaps held by consultants and contractors and labour hire, that we can also reduce that amount of expenditure across government.”
The announcement was welcomed by the Community and Public Sector Union (CPSU) – a long-term critic of outsourcing public sector work – claiming it raises significant conflict-of-interest risks and poses adverse impacts on employees, workplaces and public service delivery.
CPSU national secretary Melissa Donnelly said the union had seen story after story in recent years of what happens when public sector work and information are placed into the wrong hands.
“Public services stop serving people and they start serving profit margins,” Ms Donnelly said. “Public sector work should always be done by capable, transparent and accountable public servants.
“We know that the Coalition’s outsourcing addiction cost taxpayers billions while also damaging the public services people rely on every day – it was a bad decision for the budget and a bad decision for the public.”
Ms Donnelly said the reductions in labour hire and contractors could not and must not happen without matched increases to public sector staffing. The union recommended the government offer those people currently doing APS work via a labour hire arrangement a path to secure APS employment.
