Albanese government plans to decrease reliance on external consultants for public sector contracts

Consulting and labour-hire firms are on notice that going forward, there will be fewer contracts and less taxpayer money for them, following Saturday’s election of an Anthony Albanese Labor government.

More jobs are likely to be filled by actual public servants.

An economic plan released by Labor during the election campaign set out its key economic objectives, including a fresh focus on the public sector.

A significant part of that plan was to cut back on the number of consultants and labour-hire firms used to fulfill public sector roles.

That 13-page document will be the basis for the actions that now-Treasurer Jim Chalmers and Finance Minister Katy Gallagher take towards the public sector.

The newly elected and sworn-in Albanese boards a flight today to attend the meeting of the Quad, with leaders from Japan, India and the US, as his first international engagement as Australia’s new leader.

Labor said it was concerned about the reliance on external consultants and labour-hire firms costing the government billions each year; and also that the Coalition’s staffing-cap policy for the public service meant contractors were relied upon even more.

“Analysis of federal government contracts — for services such as consulting, staffing and recruitment — has found the Commonwealth’s market in 2020 for ‘private’ or external labour had doubled in just the previous five years and is now costing taxpayers in excess of $5 billion a year,” Labor’s policy on public sector workforce says.

The arbitrary staffing cap will be abolished by the incoming Labor government and it will seek to reduce the reliance on external contractors by 10% in the first year.

“This sensible reduction will generate savings of $3 billion over four years,” the policy says.

Expect an audit of employment to be done in the public service and for ongoing jobs to replace consulting or outsourced arrangements where the auditors find external contractors are being used inappropriately.

“In recognition of the degradation of capability in the public service under the Liberals, our plan includes a nearly $500 million reinvestment as part of the first phase to rebuild the capacity and capability of the APS, with further work to be done in government,” the policy of the incoming government says.

“This includes an immediate investment in 1080 frontline service delivery jobs in key agencies, including 200 staff for Services Australia, 500 staff for the Department of Veterans’ Affairs, and 380 staff for the National Disability Insurance Agency.”

A costings document released by the Coalition before the election held this past Saturday did not envisage any kind of review of public sector staffing or capacity. It proposed an increase in the efficiency dividend from 1.5% to 2%.

The CPSU had said the efficiency dividend increase would wind up with more than 5000 jobs being lost in order to accommodate the Coalition’s additional campaign spending promises.

This article was first published by The Mandarin.