Greens Senator Barbara Pocock says Labor is spending more than the Coalition did on external consultants. Photo: File.
Labor keeps increasing its spending on consultants to the Australian Public Service despite saying it is cutting external contracts and making savings, according to new analysis from the Parliamentary Library.
The research, based on AusTender data, shows the Federal Government ramped up its spending on consulting contractors every year of its first term in office.
Last financial year, it signed consultancy contracts worth almost $1 billion, representing a 48 per cent increase from the previous year.
The data shows the spend on contracts with the Big 4 consultancy firms – PwC, KPMG, Deloitte and EY – fell last year from $138 million to $114 million. However, the number of contracts signed with all firms overall increased from $653 million to $968 million.
The analysis was commissioned by the Greens, who have used it to claim that the government is outshining the Morrison Coalition government when it comes to spending on consultants.
Greens finance and public service spokesperson Barbara Pocock said Labor is just rearranging “deckchairs on the Titanic” by spending less on the Big 4 firms but far more with other consultancies.
She said the Federal Government’s “excessive outsourcing” of public sector work to the private sector, at three times the cost, isn’t just wasting taxpayers’ money, it’s eroding the APS.
“Labor has boasted savings on consultants every year it held office in the last parliament,” Senator Pocock said.
“Yet Labor spent more last year on consulting contracts than the final year of the consultant-addicted Morrison government.
“The numbers speak louder than their empty words.
“This data paints a picture of a business-as-usual approach following the PwC consultancy scandal and a continued lack of transparency by a government that claims to be spending less, while in fact spending even more.
“While Labor says they’re spending less on consultants, this data shows that instead of spending as much on the Big 4 consulting firms, the government is spending even more money, but just on other firms.
“What’s clear is that the government has been claiming that it has been reducing spending on consultants, but all they’re doing is arranging deck chairs on the Titanic.”
Even what are known as the Big 7 (comprising the Big 4 plus Accenture, Boston Consulting Group and McKinsey) are not securing as many government contracts, meaning Labor is making the most of smaller firms and the wider consultancy family.
And it’s doing it in big numbers with taxpayers’ money.
According to the research, Labor spent $76.5 million on 90 consulting contracts in the first two weeks of the 2025-26 financial year.
That amounts to almost 8 per cent of the government’s total spend in the 2024-25 year in just two weeks this year.
Labor increased its spending on consulting contracts every year last parliament, despite boasting savings on consulting contracts ($622 million in 2022-23, $653 million in 2023-24 and $968.6 million in 2024-25).
“Labor promised, as part of their election campaign, to cut $6.4 billion in spending by reducing consultants’ contracts and outsourced service delivery,” Senator Pocock said.
“Yet in the first 24-25 financial year, Labor spent a whopping $968 million on consultancy firms, up from the previous year’s $653 million.
“Already in the first two weeks of this financial year, the government has spent $76 million on 90 contracts.
“This is a government that has said it wants to eliminate wasteful outsourcing, yet all signs point to Labor being no different to previous governments. It’s one big smokescreen … I’ve repeatedly asked this government direct questions about Senate Estimates about their spending on consultant firms, but they have consistently refused to provide this.
“They refuse to separate the amount spent on consultants from the overall spend on external contractors.”
Finance and Public Service Minister Katy Gallagher has repeatedly stated the Federal Government’s commitment to reducing spending on external contractors.
It saved $5.3 billion overall (not just on the consultancy spend) in its first term in government, with Senator Gallagher noting that the job is not completed.
In 2023, Labor released the Strategic Commissioning Framework, which required more than 100 agencies to identify the core work that should be performed by APS employees and not outsourced, then set targets to begin bringing it in-house in 2024-25.
“Core work includes developing cabinet submissions, drafting legislation and regulation, and leading policy formulation,” Senator Gallagher said in November with the release of the first annual update on the implementation.
“It also stops the use of contractors as a member of agency executive teams as we saw under the Coalition.
“When coming to government, we set out with an ambitious agenda to reform the APS, and to strengthen capability, to ensure the APS can deliver the services Australians expect.
“This update shows the public service has set a target for more than $527 million worth of work to be brought back in-house in 2024-25.”
But the minister has also stated there will always be a role for external specialist expertise in the APS.
