The federal government signed contracts worth almost $1bn with consultants last financial year – a 48% increase on the previous one – despite committing to slash their use, according to research conducted by the parliamentary library.
The analysis, commissioned by the Greens, shows that while the value of contracts with the big four consultancy firms fell from $138m to $114m, contracts with all firms increased from $653m to $968m.
The increase comes months after the Albanese government outlined $6.4bn in future savings by cutting the use of consultants along with labour hire firms and “non-wage expenses”, including travel, property and hospitality.
Sign up: AU Breaking News email
“While there has been a notable decrease in contracts awarded to the largest consulting firms, federal expenditure for private consulting services has in fact only been redistributed to other Australian firms,” the parliamentary library analysis said.
According to the analysis, the value of contracts signed with the big four firms – PwC Australia, KPMG, EY and Deloitte – has fallen by 47% from the 2021-22 financial year, from $218m to $114m.
Part of this decline was influenced by the tax leaks scandal involving PwC Australia, which led to its entire government advisory unit being divested for just $1. This month the finance department lifted a ban on the firm competing for new government work.
The parliamentary library found the value of contracts signed beyond the seven largest firms, which also include Accenture, Boston Consulting Group and McKinsey, increased from $496m to $803m last financial year, a 61% jump.
The library assessed the value of contracts signed by departments, rather than the amount of money paid in a single year. Large, multi-year contracts could distort figures for any of the years assessed.
The Greens senator Barbara Pocock, who commissioned the research, said the figures did not match the federal government’s rhetoric about its cuts to consultants.
“While Labor says they’re spending less on consultants, this data shows that instead of spending as much on the big four consulting firms, the government is spending even more money, but just on other firms,” Pocock said.
“What’s clear is that the government has been claiming that it has been reducing spending on consultants, but all they’re doing is arranging deck chairs on the Titanic.”
The finance minister, Katy Gallagher, said the government had saved $5.3bn during its first term in office, including by reducing spending on external labour.
“The job is not done,” Gallagher said. “We’ve always said that there will continue to be a role for external labour in providing specialist expertise, but we have made significant progress towards ensuring core public service work is delivered by public servants.
“Our government is committed to reducing spending on contractors, consultants and labour hire and reversing the decade-long trend of outsourcing that became entrenched under the Coalition.”
In May 2024 Gallagher said the use of consultants had dropped by $624m year-to-date compared with the same period in 2021-22, during the Morrison government.
Late last year the finance department set new rules for departments, advising them not to engage consultants for “core work”, which includes the development of cabinet submissions, drafting legislation and policy formulation.
The analysis also found that the federal government had signed 90 contracts worth $76m in the first two weeks of the 2025-26 financial year. This represented about 8% of the contracts signed a year earlier.
The parliamentary library’s research came with several caveats, including that it was based on AusTender data, which is often updated and occasionally contains incorrect information uploaded by departments.
