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AAP
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Politics
Callum Godde and Tara Cosoleto

Union lashed over $1bn Vic consultancy costs complaint

Victorian Premier Daniel Andrews tours the Arden Station construction site in Melbourne. (Diego Fedele/AAP PHOTOS) (AAP)

Premier Daniel Andrews has taken aim at Victoria's public sector union after it documented $1 billion in consultancy spending since Labor came to power.

The Community and Public Sector Union data, released on Thursday, showed the Andrews government spent $176.89 million on consultancies in 2021/22, up from $59 million in 2014/15.

Federal CPSU secretary Karen Batt said consulting agencies were acting as a secret government workforce but coming at a premium price.

"The government continues to make hollow commitments to prune their consultant spend but never deliver, while their workforce cops a wage cap and excessive work demands because there's simply not enough staff," she said in a statement.

Mr Andrews criticised the CPSU, saying the union should not condemn consultant spending while complaining about increasing workloads.

"You kind of can't have it both ways ... if you're the CPSU complaining about too many consultancies and then complaining if you have to do more work," the premier told reporters.

"We have added the number of people that we need. We've got the expertise that is critically important.

"I'm not here to have a quarrel with that union or anyone really, but you've got to be consistent. Are there too many consultants or not enough?"

KPMG was the top company to receive government work over the past financial year, with the union data showing the agency received nearly $32 million.

PricewaterhouseCoopers, Ernst and Young, Deloitte and Allens rounded out the top five, all receiving millions of dollars.

The Department of Transport spent $37.74 million on consultants in 2021/22, while the Department of Jobs, Precincts and Regions racked up $36.26 million in costs.

Daniel Andrews has defended his government's record on using consultants. (Julian Smith/AAP PHOTOS) (AAP)

Before last year's state election, Labor promised to save $50 million a year by cutting consulting and labour hire costs.

Mr Andrews did not provide an exact dollar figure on cuts to consultancy costs, ahead of the May budget and the state's net debt being projected to hit $165.9 billion by mid-2026.

"The budget is not the budget that was delivered five years ago ... but we will deliver all of our election commitments," Mr Andrews said.

"We had a COVID emergency and we had to go and borrow money to get through, and that money now has to be paid back."

The premier denied the spiralling consultancy costs showed there was brain drain within the public service, and said many of the contracts were short-term.

"Sometimes you need specialist skills and you wouldn't go and build your own team and have it there," Mr Andrews said.

Victoria's independent Parliamentary Budget Office found halving spending on public sector consultancies would save the state $450 million by mid-2026 and $1.5 billion over the next decade.

The Greens called on the government to enact the policy and redirect the money into the public service amid tough financial times.

"With more and more Victorians being pushed to the margins, the government must put people struggling with the cost-of-living crisis before corporate profits," the party's economic justice spokesman Sam Hibbins said.

Shadow Special Minister of State David Davis, who was a frontbencher in the Baillieu/Napthine governments, said the public service worked fine in 2014/15 when consultancy spending was roughly three times less.

"The government is scooping money out of the community and spending it like a drunken sailor on consultancies," he said.

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