The federal government’s outlay on secret private consultancies has now topped $1 billion, according to an explosive report.
The revelation has prompted demands for legislation to compel politicians to make public any consultancy work paid for by the taxpayer.
The federal government is relying on private consultancy firms, rather than on knowledge from the public sector, to justify public policy, the report claims. However, this information is often not made public, making public scrutiny next to impossible.
The Australia Institute, a public policy think tank, is calling on the Australian Senate to use an Order for the Production of Documents to require consultants’ reports written for the government to be tabled in Parliament and made public.
The institute says the infamous Boston Consultancy Group report that led to last year’s shock dismissal of Australia Post CEO Christina Holgate is one such example of these secret reports. A previous report into Australia Post compiled by the same firm in 2014 was made public.
“We should stop having secret reviews. Australia Post is an asset for all Australians,” Ms Holgate said in a Senate hearing earlier this year.
The $1 billion-plus annual spend has been revealed in an Australia Institute discussion paper titled Talk Isn’t Cheap. The paper outlines the government’s spend on information that would previously have been produced in-house by the public sector.
This outsourcing has been steadily rising since the Coalition was returned to government in 2013 – to the point where its own review into the Australian Public Service (APS) found outsourcing was a key factor behind the decline in capability of the APS.
“In fact, the $1.1 billion spent on the largest consultancies last year could have employed an additional 12,346 public servants,” says Bill Browne, senior researcher at The Australia Institute.
“It is not just jobs being lost to the public sector; knowledge and experience is being outsourced too.
“Our proposal … would go a long way to ensuring that the work being carried out at considerable taxpayer expense is available for the scrutiny of the public.”
The Australian Financial Review reported in August that the majority of this consultancy work is being outsourced to four large firms – PwC, Deloitte, EY and KPMG. Government contracts have become such a big part of these firms’ business that government departments now make up the majority of their clients.
Critics say the “over-reliance on private consultancy firms” serves a dual purpose – allowing the government to slash public sector service jobs and avoiding questioning by referring back to secret reports.
“This is privatisation of Australia’s public service by stealth and it has to stop,” Labor MP Julian Hill told the AFR last year.
“The COVID-19 lockdown has triggered a deep nationwide reflection on big issues, including rebuilding national capability and the over-casualisation of work across the society,”
Shifting jobs and knowledge from the public service while at the same time paying even more to outsource that work makes no economic sense, critics say, and puts the nation at risk of having a weak and ineffective national bureaucracy.
Is it a good idea for the government to be paying private consultancy firms more while downgrading the public service? Are you happy with how your taxes are being spent? Let us know in the comments section below.
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