The federal government says it is on track with an ambitious program to reform the public service, as it unveils a plan to cut more than half a billion dollars from its external labour bill in the next financial year.
Ahead of a week of Senate estimates, Public Service Minister Katy Gallagher has announced more than 100 government agencies have set targets to reduce outsourced core work by a total $527 million in 2024-25.
The Albanese government gave public service bosses a mandate to reel in their expenditure on contractors, consultants and labour hire in 2023, and the figures are a scorecard for this mission.
Senator Gallagher is facing pressure to prove the public sector's 36,000-role expansion under her government has paid off, as the Coalition escalates attacks on so-called "Canberra-centric funding" in the lead-up to the 2025 federal election.
The $527 million target is an early sign of progress, but an audit of the government's total expenditure on outsourced labour in this financial year - due to be published in 2025 - will provide a benchmark against a "shadow workforce" worth $20 billion under the Morrison government.
The $527 million target is comprised of jobs considered core to each agency's function, which will be brought back in-house, instead of being outsourced.
The Australian Public Service Commission, which has pulled together the data, says the figure is not a saving because it will be offset by related employee expenses.
The commission also noted the figures had been provided by agencies, and had not been subject to quality assurance.
Its data shows the Department of Defence will make the boldest changes to outsourced core work, worth an estimated $308 million, or 58.4 per cent of total cuts for 2024-25.
Defence has also declared expected savings worth $471 million over the 2023-24 and 2024-25 financial years.
The National Disability Insurance Agency also tops the list, bringing $68.5 million worth of core work back in-house, followed by the Tax Office ($32 million), the Bureau of Meteorology ($19.4 million) and the Department of Veterans' Affairs ($10.6 million).
A marginal proportion of the contracts to be cut appear to be done by consultants - with only $2.8 million declared by the commission.
About a quarter of it will be labour hire ($119.1 million), while contractors account for about $87.4 million.
Defence has not broken down its figures, so its $308 million in reductions aren't spread across the categories of contractors, consultants and labour hire.
A more granular snapshot of the type of work on the chopping block shows most of it will come from ICT and digital solutions (22 per cent), followed by program and project management (18 per cent) and service delivery (16 per cent).
Of the eligible agencies, 29 did not report targets, mostly because they did not outsource any work, or very minimal work.
Senator Gallagher said the crackdown had targeted the use of external labour to develop cabinet submissions, draft legislation and regulation and formulate policy.
"It also stops the use of contractors as a member of agency executive teams as we saw under the Coalition," she said.
"When coming to government we set out with an ambitious agenda to reform the APS, and to strengthen capability, to ensure the APS can deliver the services Australians expect.
"This update shows the public service has set a target for more than $527 million worth of work to be brought back in-house in 2024-25."
