With the Federal Election days away, the Albanese Government has released its costings.
Among the costings, it will slash $6.4 billion from the use of labour hire firms and consultants. These savings will be used to fund $10 billion in election promises.
So why has the use of consultants come into focus, and what will be the impact on the Australian public service job opportunities?
Increased focus on use of consultants
Since the COVID pandemic, the use of consultants has come into sharper focus globally. Many countries, including the UK, US, Canada and New Zealand, have announced a crackdown on the use of government consultants.
In Australia, the use of consultants has risen substantially in recent decades. Between 1988-89 and 2016-17, the use of government consultants in Australia tripled. It then tripled again between 2016-17 and 2022-23.
An audit revealed the previous government spent $20 billion outsourcing more than a third of the public service operations. In 2022-23 alone, the government spent $3.2 billion on management advisory services.
Risks of relying on consultants
One of the main areas consultants have been used is to assist in policy development. For example, consultancy firms with links to fossil fuel companies were paid $1.6 million to help shape environmental policy. Consultants have also been paid to shape health policy. This has led to concerns about possible conflicts of interest.
There are also concerns that over-relying on consultants can reduce the skillset of the public service. This can lead to an even greater reliance on consultants.
Recognising these concerns, since being elected to government in May 2022, the government has been working to reduce its reliance on consultants.
In its first term of government, Labor has generated $5 billion in savings by reducing the use of consultants. Some of that work has gone toward a new government-owned consultancy firm that can assist departments in need of specialist advice.
The government pledged to expand the unit if they are re-elected.
Impact on public service job opportunities
As part of the government’s push to reduce the use of consultants, it will expect Australian public servants to do more core work.
Finance Minister Katy Gallagher has stressed there will be no job losses. She says the government will maintain public service staffing levels and the quality of services delivered
Indeed, the government’s reduction in the use of consultants resulted in 8,700 new public service jobs being created since it came into office.
Ms Gallagher says she wants departments to rely on themselves and improve the capability of the public service.
“I think there is a greater opportunity to make departments rely on themselves,” she told The Guardian.
“On big, important questions, we should be building a workforce that answers those itself.”
Ms Gallagher explained that over the past decade, the public service had been reliant on external consultants to deal with challenging policy problems or difficult questions.
To fund it’s election promises, the government will also increase visa application fees for International students.
With a renewed focus on building internal capability, the public service is entering a period of growth and opportunity.
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Article References
Belot, H (15 April 2025) ‘Finance minister vows to slash more consultants and accuses Coalition of importing Trump’s Doge agenda’, The Guardian, accessed 29 April 2025.
Belot, H & Commins, P (28 April 2025) ‘Labor releases election promise costings including saving of $6.4bn from cutting more consultants’, The Guardian, accessed 29 April 2025.
Greber, J (28 April 2025) ‘Labor demands Coalition costings and claims $1b in deficit reduction’, ABC News, accessed 29 April 2025.
Josserand, E & Sturdy, A (27 March 2025) ‘How Australia’s government is spending less on consultants – and trying to rebuild the public service’, The Conversation, accessed 29 April 2025.