The Australian’s suspect report on government consultancy spending
A suspect report in The Australian has claimed the current Labor government has recently spent almost as much on ‘expensive consultants’ as during the peak of its Coalition predecessors.
The Liberal party’s attacks and stuttering policy on the APS appear to have largely backfired during this election campaign. Now, fresh off its latest endorsement for the Coalition, The Australian is attempting a different approach in a last-minute tack towards ‘whataboutism’.
In a report sub-headlined, “Anthony Albanese spends as much as Scott Morrison on the services of KPMG, PwC, EY and Deloitte”, The Australian has made the claim that the current Labor government has once, previously, paid close to the same annual amount for “expensive consultants” as during the peak of spending under Liberal.
While it’s difficult to pin down the report’s shifting reference points, the publication puts forward a $660 million price tag on consulting expenditure over the 2023-24 financial year as per AusTender data “reviewed exclusively for The Australian”, compared to a $680 million figure calculated to have been spent under the previous government over the 2019-20 period.
According to a published table provided by the unnamed analysts, these selective, single-year numbers relate to AusTender data for Commonwealth contracts awarded over an arbitrary worth of $1 million under the procurement platform’s ‘consultancy’ classification.
Sliding metrics
Using such a metric, the $665 million supposedly spent among all providers on ‘consulting’ in 2023-24 appears reasonably close on the surface when measured against the $682 million sum of over 2019-20, ignoring for the moment that Labor’s ongoing long-term effort to reduce spending has seen that outlay drop to $577 million this year, according to the paper’s own data.
Yet, the report then states that the data indicates EY, KPMG and Deloitte received consulting contracts adding up to $145 million in 2023-24 (it’s unclear if the $1 million threshold has still been applied to arrive at that total), before bumping the number up to in excess of $470 million through a wider analysis of “income reported in other categories”.
Here, the inflated $470 million tally said to have been collected by three of the Big Four members across all Commonwealth contracts during 2023-24 doesn’t remotely compare if applying the same broader criteria. Previous analysis by the AFR and many other organisations puts the true comparative figure at $1.4 billion during the Coalition’s final year in office.
Big Four bait
Headline-grabbing PwC also seems to immediately slip out of the equation, with attention instead turning to, in the author’s words, a little-known consultancy by the name of Nous Group, which is mostly run “by former public servants”, and a contradictory follow up statement that, “in fact, the data shows consulting budgets have simply been reallocated away from the Big Four.”
As an amusing aside, the article quotes an anonymous Big Four partner who in reference to Nous complains that it seems a little unfair that their firm now has to compete with people who used to work at the same government department, but we’ll skip a recap on the well-documented revolving door between the Big Four and the government and public sector and get back to the point.
The sub-headline of The Australian’s ‘exclusive’, which is objectively incorrect in its assertion – even by the numbers the newspaper has been supplied with and itself passes on in turn – is at very best a bit muddled, but at worst strikes as much more likely to be intentionally misleading considering the contradictory report and its own details which follow.
Overall outsourcing
The Big Four here is the bait, with the article’s real thrust arguing that Labor has misled the public by obscuring the amount it spends on consultants, which is in turn a distraction from the bigger picture at the heart of the debate on APS capabilities and overall outsourcing, with Labor itself partly to blame for commonly conflating advisory with the latter.
Still, in the lead-up to the last election, the party vowed to slash $3 billion from its public sector outsourcing bill over four years, which included consultants, contractors and external labour, converting expensive temporary hires into permanent positions while building up APS capabilities. On that basis, the government has surpassed and since extended its stated goals.
The Australian did however find an unlikely ally in its campaign in Greens senator Barbara Pocock, who co-led the multiple senate enquiries into the industry following the PwC tax breach scandal and has been recently questioning the government on the specific question of what proportion of its savings have been achieved via a reduction in actual consulting.
“It’s virtually impossible to get a clear picture of the government’s spending on consultants,” Pocock told the newspaper in renewing her calls for reforms to the way contracts are reported on AusTender, adding to an increasingly dizzying article criticising the government’s spending on consultants based on data derived from AusTender.
Public sector battle
With a side of implied Labor hypocrisy in its ongoing advisory spending, which is like somebody totalling my car and then pointing out my Uber rides while it’s still being repaired, the logical manoeuvring of The Australian’s article bends past breaking when keeping in mind its actual purpose; to sway public opinion towards the party which has pledged to cut 45,000 APS jobs.
Naturally, such a policy shift would once again greatly increase the government’s self-perpetuating reliance on advisory and outside support, together with its spiralling associated costs. Meanwhile, as its APS rebuild gains momentum, the incumbent government is heading in the other direction, declaring that if reelected it would find a further $6.4 billion in outsourced savings over the coming four years.
