Government saves $450 million by cutting consultant costs in one year
A government audit discovered that the previous government had spent $1 billion on consultants without proper oversight and excessive contracting.
Under the Minns Labor government, savings of over $450 million have been achieved in the first year on consultant and contractor services.
Consultant spending across agencies has decreased by $72 million, from $130 million in 2022-23 to $58 million in 2023-24.
Following a report by the NSW Auditor-General, it was found that the previous Liberal-National Government had spent over $1 billion on external consultants without adequate supervision.
The report also highlighted that the big four consulting firms were increasingly handling generalist tasks for the NSW public sector.
The Minns government also claims that the former government issued more than 10,000 contracts in its last five years—equivalent to one new contract every hour.
Efforts are being made to reduce spending on contingent labor—contractors acting as de facto public servants.
Latest controls have reduced this expenditure from $2.1 billion in 2022-23 to $1.7 billion in 2023-24, marking a 17 percent decline.
The findings of the report titled “Building up NSW Public Service Capability and Driving Down Use of Consultants,” released in May 2024, are under review.
A shift towards in-house expertise is being encouraged by setting up a unit within the Premier’s Department to promote agencies’ use of internal expertise for policy and project development.
It is estimated that utilizing public sector expertise could decrease contract costs by up to 52 percent while also retaining knowledge and talent for future projects.
Acting Treasurer Courtney Houssos defended the government’s actions, emphasizing the commitment to ensuring efficient expenditure of taxpayer money.
The Opposition has criticized Labor’s financial management, citing alleged reckless spending and pointing to a slowed economic performance.
Shadow Treasurer Damien Tudehope accused Labor of mismanagement, comparing its economic performance unfavorably to that of the Albanese government.
