The NSW government has announced a major shake-up to the way it engages external advisers, banning the use of consultants for core government work. From now on, public agencies will only be able to bring in external consultants in limited circumstances.
For example, when specialist expertise is unavailable internally, when independent advice is required, or when temporary staff are needed to manage peaks in demand.
The move marks a significant shift in how government business will be conducted. It comes after years of scrutiny over the billions spent on external consulting and contracting. It signals a push to restore capability within the public service itself and reduce reliance on private firms.
Critics have long argued that the widespread use of consultants undermines transparency and weakens in-house expertise. Supporters, however, claimed it offered flexibility. This latest policy suggests the government is siding firmly with the need to rebuild long-term capability.
What’s behind the move?
Government spending on consultants has been in the spotlight for a long time. In the 2024 financial year, the government spent $60 million on consultants and $1.7 billion on contractors. Between 2018 and 2023, the big four consulting firms earned $240 million from the New South Wales government. However, in the 2023 and 2024 financial years the NSW government did make cuts of $450 million to consulting services.
These reductions were part of a wider push to rein in costs and rebuild confidence in the public sector’s ability to deliver. Earlier this year, the Federal Government also promised to reduce its reliance on external consultants. This demonstrates that this is not just a state issue but part of a broader national rethink.
How has the government explained the decision?
Courtney Housos is the NSW minister for domestic manufacturing and government procurement. She says this decision is all about restoring the capability of the public service.
“This policy is about putting the ‘public’ back in public service. It ensures that core work is led by accountable, experienced public servants, not handed off to consultants or private contractors,” she said.
“This is a critical step in restoring the capability of the NSW public service. We are ending the overreliance on consultants, safeguarding institutional knowledge, and ensuring taxpayer money is spent wisely.”
According to the government, agencies will now be expected to handle more tasks in-house. This includes developing laws, regulations, policies, recommendations and cabinet submissions. That means more responsibility — and opportunity — is being placed on the shoulders of public sector employees. Building internal knowledge will not only strengthen government capacity but also reduce the risk of information loss when external consultants move on.
For job seekers, this shift also underscores the growing opportunities within the public sector. Governments are investing in stronger, more resilient internal teams. As a result, demand for skilled professionals in policy, administration, finance, IT and service delivery is expected to rise.
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Article References
Tadros, E (18 September 2025) ‘NSW bans consultants from core government work’, Financial Review, accessed 18 September 2025.