The federal government faces criticism after removing key accountability targets designed to stop public service agencies from outsourcing core work, a move that comes despite a $1.2 billion increase in temporary personnel contract spending.
The Community and Public Sector Union (CPSU) warned that abandoning these targets under the public service's Strategic Commissioning Framework (SCF) would reduce agency oversight and drive even greater numbers of outsourced jobs.
The policy shift coincided with a sharp rise in external procurement.
According to AusTender data, spending on temporary personnel services jumped nearly 52 per cent, rising from $2.33 billion to $3.53 billion between the 2024-25 and 2025-26 financial years.
In addition to this financial increase, the volume of temporary personnel procurements rose 18 per cent from 7761 to 9160 over the same period.
Union officials rejected any justification for the shift, saying that removing the targets gave departments permission to engage private labour hire and contracting firms instead of investing taxpayer dollars into permanent, trained public servants.
CPSU deputy secretary Rebecca Fawcett disputed the claims made by agencies regarding their low outsourcing numbers.
"Removing clear targets to reduce wasteful and ineffective outsourcing lets agencies off the hook at a time when we should be strengthening obligations to bring core public service work back in-house," Ms Fawcett said.
"When agencies can look at those numbers and conclude there is little or no outsourced core work left to address, it is clear we cannot simply rely on agencies to mark their own homework."
The union highlighted several large departments where core operations remained heavily privatised despite the broader insourcing push.
At the Australian Taxation Office, about 1800 call centre workers employed by multinationals Probe, Concentrix and Serco continued to perform core service delivery work.
The Department of Home Affairs outsourced more than 100 public-service seagoing roles within its National Marine Unit to private contractors.
The National Disability Insurance Agency relied heavily on external staff, with about 1180 labour hire workers remaining at the agency as of April 2026, many of whom worked for Serco as the first point of contact in contact centres.
A Canberra Times analysis of contract descriptions revealed that this contingent workforce was heavily concentrated in the technology space, with "information and communications technology (ICT) labour" and "ICT contractor" standing out as the most frequently specified roles.
Federal efforts to reduce outsourcing faced challenges as expenditure on information technology (IT) temporary personnel nearly tripled between 2022-23 and 2025-26.
This temporary spending increase aligned with a local contractor boom, which was fuelled by slow public service hiring that created an increase in hourly contract roles even as permanent job advertisements fell.
The SCF was originally introduced in late 2023 to reduce public service reliance on external contractors and consultants and strengthen internal institutional capability.
For the 2024-25 financial year, agencies were required to set formal targets to transition a collective $527.6 million worth of core functions back in-house.
Although the public service collectively met its overarching financial goal - driven by large reductions within Defence and the Australian Taxation Office - individual agency performance was highly mixed, with more than one-third of departments failing to meet or only partially meeting their initial targets.
For the 2025-26 financial year, implementation diverged significantly as 62 agencies did not publish new reduction goals, reporting that they had little to no outsourced core work remaining on their books.
At the same time, a separate group of agencies omitted their 2025-26 targets entirely, despite failing to meet their initial 2024-25 insourcing objectives.
The Australian Public Service Commission (APSC) defended the structural shift, saying that with the majority of agencies reporting they had minimal outsourced functions, a reduction in the number and size of targets was entirely expected.
The commission said the implementation of the framework had been successful and, over time, targets were a less effective mechanism to drive progress.
It said the policy was designed to bring core work in-house rather than cease all outsourcing entirely, and the framework set a clear expectation that most roles would be delivered by direct employees.
The APSC said departments setting targets for 2025-26, or outsourcing core work beyond allowed exceptions, were still strictly required to report their data in upcoming annual reports.
This policy shift comes as the Australian National Audit Office (ANAO) is conducting a performance audit of the effectiveness of the Strategic Commissioning Framework.
This independent audit, which is scheduled to be tabled in October 2026, will evaluate the Australian Public Service Commission to ensure the framework successfully drives the reduction of external consultant spending and rebuilds internal public-sector capability.
In June 2026, the union made a formal submission to that ANAO inquiry, demanding stronger safeguards to keep public-sector work in the hands of public servants.
