The Australian federal government signed contracts worth almost $1bn with consultants in the last financial year, a 48% increase on the previous year, according to research by the parliamentary library. This comes despite the Albanese government's commitment to slash spending on external advisers.
The analysis, commissioned by the Greens, shows that while contracts with the big four consultancy firms—PwC Australia, KPMG, EY and Deloitte—fell from $138m to $114m, overall contracts with all firms rose from $653m to $968m. The parliamentary library noted that federal expenditure for private consulting services has been redistributed to other Australian firms rather than reduced.
Greens senator Barbara Pocock said the figures contradicted the government's rhetoric. 'While Labor says they're spending less on consultants, this data shows that instead of spending as much on the big four consulting firms, the government is spending even more money, but just on other firms,' she said. '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.'
Finance Minister Katy Gallagher defended the government's record, stating that it had saved $5.3bn during its first term, including by reducing spending on external labour. 'The job is not done,' she said. 'We've always said that there will continue to be a role for external labour in providing specialist expertise, but we have made significant progress towards ensuring core public service work is delivered by public servants.'
The increase comes months after the government outlined $6.4bn in future savings by cutting the use of consultants, labour hire firms and non-wage expenses. In May 2024, Gallagher said the use of consultants had dropped by $624m year-to-date compared with the same period in 2021-22. Late last year, the finance department set new rules advising departments not to engage consultants for core work, including cabinet submissions and policy formulation.
