A company that makes podcasts discussing explicit sex acts and interviewing porn stars won a $382,712 contract from the Office of the Prime Minister and Cabinet under the Morrison government.
The contract, detailed in published reports, is among other taxpayer-funded deals revealed, including:
- The regulator in charge of Australia's financial stability pays contracts to companies based in tax havens
- Our competition watchdog spends more than $100 million on temporary staff
- The agency overseeing our digital media spent $132,000 on a White Pages listing
Cost of living
Tomorrow night's federal budget has to balance a lot of competing demands, with millions of people feeling the impact of a cost of living crisis.
"We'll have government spending of roughly in the realm of $650 billion. So that's a lot of money that is being spent," says Committee for Economic Development of Australia (CEDA) senior economist Cassandra Winzar.
Budgets — particularly multi-billion-dollar programs — reveal the true priorities of governments.
For Ms Winzar, the bigger issue is a lack of checks or what's called "evaluation" of programs.
Essentially, is what we're paying for doing what we hoped?
"Look, it's incredibly concerning," she says.
"A lot of that money is coming from taxpayers and they should be wanting to know how that money is being spent, and what impact it's having."
Graphic content
The federal government might dole out nearly $650,000,000,000 in spending annually, but it all adds up.
Between December 2020 and November 2022, taxpayers gave $382,712 to a Queensland company for "communications" services — dealing with social media content relating to COVID-19.
One of KK&O's divisions is Sunnydale Studios, which has published podcasts including 'Big Love Energy', 'No Brilliant Jerks' and 'So Unladylike'.
The latter discusses sex, dating, "unladylike topics with uncensored opinions" and includes graphic descriptions of explicit acts including an interview with a couple who make pornography.
In a statement, a spokesperson from the Department of the Prime Minister and Cabinet said the contract paid for content moderation on social media platforms where the government had put information about its response to COVID-19.
"The Department of the Prime Minister and Cabinet contracted KK&O Agency to provide social media moderation for Australian Government social media channels during the height of the COVID-19 pandemic."
Director and co-founder of KK&O Agency Ty Kudla says about five communications specialists were working at any one time.
"Certainly fast-paced, highly reactive and all-consuming during the peak of COVID response," he says. "Intense? Absolutely".
A tiny part of a budget worth about $650 billion, Mr Kudla extols the benefits of the government engaging specialists when needed.
"We were able to be highly reactive and cater to the changing needs rapidly, day-to-day," he says. "We were often able to pick up a phone and collaboratively solve problems and have discussions about response strategy quickly at any time of day, weekends (or) public holidays".
Asked what the former government would think of the firm's other work, he was diplomatic.
"Given the breadth of clients, industries and mediums our agency works across, I image they’d take it with a grain of salt."
Contract quirks
Prudential regulator APRA works to keep the entire financial system stable.
But it has two contracts that send money for services provided in Australia to companies based in countries that are sometimes used as a destination to legally minimise tax.
The Australian Prudential Regulation Authority paid $526,613.40 for the four-year lease on its South Australian office to a company called ’25 Grenfell Street Adelaide Real Estate Netherlands B.V.’.
LinkedIn is based in the US. But the regulator paid $144,174 to LinkedIn’s Singapore office for ‘education and training services’.
There is nothing illegal about buying services from companies based in Singapore or The Netherlands, but both locations are controversial due to the way their tax systems allow multinational companies to shift profit from higher-taxing countries like Australia.
NIDA training
The prudential regulator continues to keep good company, training with Australia's most prestigious drama school, NIDA, the National Institute of Dramatic Art.
This makes the bankers and analysts of the notoriously media-shy regulator — which supervises the financial stability of key institutions such as the banks, super funds and insurers — the colleagues of former graduates Cate Blanchett, Mel Gibson and Hugo Weaving.
Previous contracts totalled more than $430,000. The latest one for ‘human resources services’ is valued at $113,316.50 for the two years to April 2023.
APRA declined to comment for this report.
When the information was first revealed in 2019, APRA said staff participated in NIDA's presentation skills training courses because executives: “frequently attend events and conferences to deliver speeches and presentations, or take part in panel discussions, where they communicate industry developments to stakeholders and media".
The figure is dwarfed by the $699,555.20 it paid the Australian Institute of Company Directors (AICD) for education and training in a three-year period to May.
Communications consultant Crab Management, headed by Tony Briggs, received $156,890.01 for providing training in the years 2019 to 2022. In a rare note of deflation, the contract for 2022 to 2025 is listed as $145,200.
Temporary staff
But the biggest problem APRA might have is getting anyone to work there.
The regulator spent $36,157,056.35 on recruitment and ‘temporary personnel services’ in 91 contracts, most beginning in 2022 and most finishing this or last year.
Like APRA, the Australian Competition and Consumer Commission spends an enormous amount on staff who are bought in as consultants and on temporary contracts.
The competition watchdog has 347 contracts listed in recent disclosures, the vast majority of them listed to run for periods between 2022 and 2023. (Three of them run to 2024, one to 2025)
They cover ‘temporary personnel’ and ‘management advisory’ but not functions like internal audits, training or legal services.
The bill is $101,049,748.69
In a statement, a spokesperson for the ACCC says the use of contractors has increased in recent years because specific digital skills were needed.
"We aim to achieve an efficient and effective blend of employees and contractors, taking into account factors such as allocated average staffing levels and duration of projects and funding," the statement read.
Much of that money would be paid as wages through the recruiter, with the middle-man taking a cut. This doesn’t include vast sums spent with lawyers and consultants like Ernst and Young and PricewaterhouseCoopers (PwC).
That concerns Barbara Pocock, a member of a Senate committee looking into the influence and scale of the consulting industry.
"It's clear, we don't know exactly how big the consultancy industry is in our public sector," she says. "But it's in the billions (of dollars annually)".
"It's grown very significantly in the last 20 years, we don't have enough information about its size, exactly what it's doing. And we don't have enough information about what it's actually achieving".
The inquiry began after a senior PwC consultant leaked confidential government briefings about possible multinational tax changes.
The Tax Practitioners Board has suspended the licence of former tax partner at PwC Peter-John Collins for two years over the integrity breaches.
"I think many Australians would be really shocked to know how much of their money is going to private consultants and contractors, for some, in some cases, very basic public service work," she says. "It's core work".
Lawyers fees
The ACCC also has epic legal bills, fitting for an organisation that takes corporations to court to try to punish them over allegations of wrongdoing.
But it adds up. There were 127 contracts for legal services in the 2022 calendar year, some of them stretching from 2021 but none going past this year.
A few firms hoovered up most of it. Almost the biggest, the Australian Government Solicitor.
- AGS: $9,293,209.48
- Baker and McKenzie: $575,514.60
- Corrs Chambers Westgarth: $2,137,442.18
- DLA Piper Australia: $10,872,435.69
- Johnson Winter and Slattery Lawyers: $7,913,731.52
- Norton Rose Fulbright: $3,644,565.22
- Webb Henderson: $1,714,787.94
The ACCC defended the costs that "support and represent the agency in its enforcement and litigation work", including in relation to mergers.
"This activity is core to our role as an enforcement agency and managed through our internal budget allocation. Our legal services procurement is subject to various levels of oversight, including parliamentary processes, to ensure it delivers value for money"
Analogue costs
Despite the shift towards digital delivery of many services, some big costs reflect our real-world reality.
The Australian Bureau of Statistics (ABS) paid $20,817,342 for postal delivery services to do with the Census.
More than 10 million forms and letters were delivered to homes across the country. A stamp for a regular letter costs $1.20.
The Australian Communications and Media Authority (ACMA) is paying Telstra $132,000 for a two-year listing in the White Pages.
The Department of Home Affairs spent $1,253,631.57 on ‘advertising in White Pages’ between 2021 and 2024. Services Australia paid $925,155.00 for White Pages advertising for just the year 2021 to 2022.
ACMA is also about to finish up paying $302,540.87 for 10 years' worth of extra car-parking spaces at its Canberra office.
In a statement, ACMA says it uses the White Pages to promote public awareness of its services.
"In particular, some vulnerable groups such as older Australians may not be in a position to use online services. Since such groups may need to report spam, notify us of attempted fraud or use the Do Not Call Register, the White Pages entries help the ACMA to ensure it is identifiable and accessible for as much of the public as possible."
Evaluation needed
There's nothing necessarily wrong with any of the contracts noted in this article.
What troubles experts like Cassandra Winzar is the government's lack of scrutiny of the billions it is spending.
"We can't tell whether those policies were actually having the impact that we wanted them to have," she says. "They may well have, but there's probably a good proportion of those that actually weren't having the impact".
"The main issue is we actually can't give an answer to: Did they work? Did they achieve what they set out to achieve?"
Ms Winzar says the key problem is that many programs paid for by taxpayers didn't have a clear objective or outcome.
In her report, 19 of 20 federal programs costing more than $200 billion — 95 per cent — were not "appropriately evaluated".
A quarter (five of 20 programs) had no framework to evaluate programs at all. The rest had evaluation that was incomplete, inconsistent or poor.
And there's impact: the risks of not evaluating programs arose in recent royal commissions into aged care, disability and robodebt.
"As an economist and someone who's actually worked in the public sector, I have been really shocked as a new senator about how much money is wasted on projects where there is almost no evaluation," says Barbara Pocock.
"So very big contracts, and very little evaluation of their outcomes".
More scrutiny
A closer look at how programs worked — or didn't — is coming.
The federal budget has set aside $10 million for a new Treasury evaluation unit to examine programs.
"The science of evaluation has advanced a lot, but we haven't done enough to measure what works," the government's Dr Andrew Leigh told ABC Canberra's Adam Shirley last week.
"So this is about spending taxpayer money more wisely and making sure that we're refining programs so they're as effective as they can be."
The program aims to bring more rigour to evaluation. In some cases it will use randomised trials, like in medicine, to find out what works best as a policy response to a problem.
With about $650 billion on the line, evaluation could make the money go further.
