Life on the West Island - Consulting dollars

Recently, there has been much talk from the West Island opposition of its plans to follow Donald Trump and slash 36,000 jobs from the public service. During the last three years, those jobs have largely replaced the much more expensive private consultants so beloved by the Morrison government, which were starkly revealed to be prejudiced and highly influenced by large mining and banking corporations, especially illustrated in the scandal involving one of the Big Four consultants deliberately leaking confidential advice it was giving to the Tax Office instead to its clients, so that they could evade taxes.

Former head of the Public Service Commission, Professor Andrew Podger, has looked at the most recent “State of the Service” report (SOSR) to put this issue into context. Podger says The growth of the APS is not nearly as dramatic or costly as the opposition claims, nor is it concentrated in Canberra. Table 9 in the SOSR shows the APS headcount is lower now as a percentage of the Australian population than it was in 2008 (0.68% compared to 0.75%) and lower as a percentage of the Australian workforce (1.36% compared to 1.52%).

The spread of employment is consistent with the government’s claims that it has given priority to improved services to the public, such as through the NDIS, Veterans’ Affairs and Centrelink.

Some of the most recent growth has also been offset by reduced use of consultants, contractors and labour hire, though we are yet to see an update of the APSC/Finance Department Employment Audit, which revealed a workforce of some 54,000 private sector employees engaged by Commonwealth agencies in 2021-22.

The Guardian reported on the size and cost of consultancies during the last full year of the Morrison government:

The previous Coalition government spent $20.8bn outsourcing more than a third of public service operations, an audit has found. The findings of the Australian public service audit of employment have been released, examining the hiring practices and associated costs of 112 public service agencies, excluding the CSIRO, Australian Broadcasting Corporation, and parliamentary departments.

It found the equivalent of nearly 54,000 full-time staff were employed as consultants or service providers for the federal government during the 2021-2022 financial year – the equivalent of 37% of the 144,300-employee public service. The audit also found outsourced service providers made up nearly 70% of the $20.8bn total spending on external labour, while more than a quarter of it went to contractors and consultants. Information technology and “digital solutions” made up 43% of the spending on external labour, while 17% went to the actual delivery of services.

Katy Gallagher, minister for the public service, said the outcome of the audit showed the former Coalition government was “plugging gaps” in the public services with their “arbitrary cap on the number of government employees”, and creating a “shadow workforce”.

“The Morrison government maintained its artificial cap on public servant numbers, promoting a mirage of efficiency, but were at the same time spending almost $21bn of public money on a shadow workforce that was deliberately kept secret,” Gallagher said.

Now the independent Centre for Public Integrity (CPI) has published a well-researched paper and factsheet entitled Consulting Dollars, which looks at the massive costs and dangers of the previous government’s dependence on large private consultancy firms. The CPI report details improvements to public accountability and cost since the 2024 report of a Senate Committee on the subject. Its executive summary is:

This factsheet contains key insights into government spending on external consultants, in particular, departmental compliance with reporting requirements introduced in 2024.

The report by the Senate Finance and Public Administration References Committee into the management and assurance of integrity by consulting services included a recommendation that the Finance Minister table biannual statements detailing expenditure on contracts worth $2 million or more.

This factsheet assess compliance with this requirement. It finds sufficient transparency is still lacking in several departments, underscoring the need for stronger oversight and clearer reporting requirements to ensure public funds are used effectively.

Key findings

• Defence, the Australian Submarine Agency, and the National Emergency Management Agency failed to adequately explain contract purposes.
• The Department of Health & Aged Care was the highest-spending department on consulting services.
• Deloitte received the most significant total value of contracts.
• Nous Group dominated in management advisory services, with the highest percentage of contracts in this category.
• 14% of management advisory contracts provided no meaningful descriptions, with some agencies – such as Services Australia – giving no details beyond the generic label of 'management advisory services'.
• Some departments would benefit from additional guidance to allow them to better support the Minister for Finance in her efforts to comply with her reporting obligations.

While in most cases Departments and agencies have provided descriptions that go at least some way towards explaining the purpose of contracts they're reporting, 14% of 'management advisory services' contracts are described simply as 'management advisory services' or 'management support services': that is, the description provides no information that isn't already provided by the subject matter categorisation. This suggests that some Departments — specifically Services Australia (100% of whose management advisory service contracts are described simply as 'management advisory services'), the Department of Defence, the Australian Submarine Agency and the National Emergency Management Agency — would benefit from additional guidance to allow them to better support the Minister for Finance in her efforts to comply with her reporting obligations.

Norfolk Islanders would be well aware that so much of West Island government expenditure purported to be for the benefit of the Island is in fact largely wasted on expensive consultancies from offshore firms which have little or no knowledge of Norfolk society, customs and governance experience. Yet the West Island government persists in engaging these consultants and fly-in-fly-out managers. Norfolk Island will never break the strangling hold of wasting consulting dollars until the West Island abandons its anti-democratic colonial approach to justice and fails to grant greater self-determination for all Norfolk Islaners.