Big Four bag $90 million in NSW government contracts
The Big Four have bagged over $90 million in NSW government consulting contracts during the past year – a more than 10 percent rise on the year previous.
The government of NSW has forked over more than $90 million in collective consulting fees to Big Four firms Deloitte, EY, PwC, and KPMG during the past calendar year, marking a 10.6 percent rise on 2019 expenditure. The figures, provided by the NSW opposition Labor party, have kicked off the latest chapter in Australia’s perennial cross-aisle debate on the public service sector and outsourcing.
“The Berejiklian government must explain why it needs to bring in expensive consultants when it has more than 400,000 employees in the public service,” said NSW Labor Shadow Treasurer Walt Secord, who highlighted the “extraordinary” nature of increased consulting expenditure during a time of recession. “The government should be using its own departments and staff to do this work.”
NSW Treasurer Dominic Perrottet however claimed the size, scale and complexity of some of the work undertaken in the state necessitated specialist consultants, such as those of the Big Four. Yet criticism of the spending follows November’s Covid-trashed budget, which featured a record deficit of $16 billion and state debt ballooning out to $104 billion within four years.
A flagship of the budget is the government’s plans to eliminate stamp duty in favour of an annual land tax – a significant reform for which it brought in KPMG on a $5.5 million six-month project to provide expert “management functions, communications, economic modelling and implementation”, again drawing attention from the opposition and questions as to why Treasury couldn’t handle such tasks in-house.
“The use of consultants to supplement the core skills of Treasury for a unique and major reform is an effective use of public resources,” said a department spokesperson, adding that, “Treasury will evaluate the need for ongoing assistance from the consultants beyond March 2021. If additional assistance is needed, a separate competitive request for proposals will be issued.”
Elsewhere, the state government last year also brought in KPMG on a $7.5 million contract to aid NSW Transport with “organisational design”, helping to raise the government’s 2020 consulting spend to almost $93 million as compared to around $84 million in 2019. Meanwhile, it was reported earlier this month that the government is looking to claw back some $8 million in savings through public sector redundancies.
Public Sector Association general secretary Stewart Little noted the redundancies were still job losses regardless of their voluntary nature. “These roles won’t be replaced and it will leave NSW with fewer jobs overall. This government awards $5 million in contracts to outsource its policy plans to Big Four consultants, and then cuts jobs – all in the name of efficiency. That’s not efficiency, it is economic vandalism.”
