Community and Public Sector Union secretary Karen Batt.Credit:Eddie Jim
A spokesman for Treasurer Tim Pallas said the use of consultants had increased during the pandemic as the government responded to an unprecedented global crisis.
“Now that the worst of the pandemic is behind us,we will reduce this spending – as we promised during the election campaign,” the spokesman said.
The government argues it needed to rely on consultants to provide specialist and technical support for crucial initiatives such as the COVID-19 response and Labor’s Big Build infrastructure agenda.
Immediately before the November 2022 state election,Labor promised it would save $50 million a year by cutting spending on consultants and labour hire from next financial year.
Victorian treasurer Tim Pallas has promised the government will cut back on the use of consultants.Credit:Nine
University of Melbourne school of government honorary senior fellow Marty Bortz said there was a growing awareness among senior bureaucrats and politicians that the public sector had become over-reliant on consultants,and that much of the corporate memory now resided with contractors.
But Bortz,who himself works part-time as a consultant,said it would take many years to restore the skills and expertise that had been lost.
“It’s a long-term project,” he said. “Part of it would be related to hiring practices,to the sort of the relationship between the universities and governments,creating a culture of looking at the public service as a profession,like a lawyer or engineer.”
The CPSU figures show that over eight years since Labor came to power,some $896 million has been spent on consultancies across the nine government departments and Victoria Police.
The biggest spender has been the Department of Transport,which last financial year handed over $37.7 million,including $7.9 million to Deloitte and $5.9 million to KPMG. The Department of Jobs,Precincts and Regions spent $36.3 million.
The spending surge follows a 2019 government edict banning departments from hiring consultants to “undertake work identified as a universal and enduring public service function”.
That,according to the government’s own guidelines,means no outsourced private sector work when it is “intrinsic to the running of the public service and delivery of government priorities”.
Premier Daniel Andrews dismissed the criticism and said specialist expertise was often needed for short periods rather than full-time. He said his government needed to outsource more work than previous governments because of more major projects in the pipeline.
“Of course expenditure in lots of areas is higher because the outputs are higher – more jobs,more projects;we get things done,” Andrews said on Wednesday. “I wouldn’t have thought that was something to be critical about.”
The NSW government has also faced questions about its use of consultants. A report by the Audit Office of NSW found the whole of the state government,including smaller government agencies,spent about $1 billion between 2017-18 and 2021-22. It said it was unlikely that state government agencies would meet a 2019 policy promise to cut consultancy expenses by 20 per cent each year between 2019-20 and 2023-24.
Federal Labor is also pushing to cut spending on consultants and labour hire companies by $3 billion a year as part of a plan being spruiked by Finance Minister Katy Gallagher aimed at “rebalancing and rebuilding” the internal capability of the federal public service.
With Rachel Eddie
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