The previous Coalition government spent $20.8bn outsourcing more than a third of public service operations, an audit has found.
The federal government released the findings of the Australian public service audit of employment on Saturday, which examined the hiring practices and associated costs of 112 public service agencies, excluding the CSIRO, Australian Broadcasting Corporation, and parliamentary departments.
It found the equivalent of nearly 54,000 full-time staff were employed as consultants or service providers for the federal government during the 2021-2022 financial year – the equivalent of 37% of the 144,300-employee public service.
The audit also found outsourced service providers made up nearly 70% of the $20.8bn total spending on external labour, while more than a quarter of it went to contractors and consultants.
Information technology and “digital solutions” made up 43% of the spending on external labour, while 17% went to the actual delivery of services.
Katy Gallagher, minister for the public service, said the outcome of the audit showed the former Coalition government was “plugging gaps” in the public services with their “arbitrary cap on the number of government employees”, and creating a “shadow workforce”.
“The Morrison government maintained its artificial cap on public servant numbers, promoting a mirage of efficiency, but were at the same time spending almost $21bn of public money on a shadow workforce that was deliberately kept secret,” Gallagher said.
“The Australian public service and those who work within it perform a critical role in our democratic system and should be valued by government.
“Labor is committed to rebuilding the APS, its capability and ensuring that jobs that need to be done are delivered, where appropriate, by public servants.”
In 2015, the-then Coalition government made a decision to keep public sector staffing levels at the approximate equivalent of 2006-2007 levels, the equivalent of 167,596 staff, excluding the military.
In 2021, the Community and Public Sector Union told a senate inquiry into the capability of the public service that labour hire and external contracting was used for day-to-day public service work due to government policies meaning agencies were unable to directly employ staff.
Labor promised during last year’s federal election campaign to abolish the staffing cap on the public service and conduct the audit of employment if it won government, with the view to reducing government reliance on labour-hire or external contractors.
The policy has been long-held by the party, which also took it to the 2019 federal election.
Gallagher said Labor “acknowledges that there is a role for external labour” in the public service but said it should only be used where it provides “a clear value add”.
