$1.2b consultancy bill blows Prime Minister Anthony Albanese’s big election savings promise

In opposition, Labor vowed it would cut $3.6 billion in consultants over the next four years. But a huge $1.2 billion spend in just six months looks set to blow up another Anthony Albanese promise.

The Federal Government has been accused of blowing hundreds of millions of dollars on consultants, despite its pre-election boasts that it would save nearly $3.6 billion over the next four years.

In opposition, Labor vowed it would cut $3 billion from the amount the federal Government spends on consultants and contractors and cut another $570 million in the annual spend on advertising, lawyers and travel expenses.

In October’s budget it promised these cuts would start this financial year, with a claimed drop in spending of $642.5 million.

But, based on the rate at which the government has been hiring consultants in the six months since July 1, this is unlikely to be met.

In the first half of this financial year the AusTender website shows $644.4 million in consulting contracts have been entered into by the Commonwealth for 2022-23.

Still spending big... Prime Minister Anthony Albanese. Picture: NCA NewsWire/David Geraghty

According to the answers given to Opposition questions asked at Senate budget estimates hearings, the total amount that was spent on consultants in the whole of the previous financial year 2021/22 was $954.4 million.

Yet contracts signed in the first half of the 2022-23 financial year, for consultancies that will run past the end of June 30, have already passed $1.5 billion.

When in opposition Labor promised it would eliminate spending on outside contracted labour.

But, in the first six months of this financial year, the Government has spent more than $1.2 billion on consultants, ­labour-hire contracts, advertising, audit, travel and legal services across all departments and agencies.

Opposition Finance spokeswoman Jane Hume says Labor’s ability to meet its election promise to slash consultancy spending is evaporating fast.

Opposition Finance spokeswoman Jane Hume said the numbers showed Labor will struggle to meet its pre-election savings promise.

“In their October Budget they said they would find more than $600 million in savings this year on consultants and services like advertising and travel but their own contract data shows they have simply kept on spending, locking in billions more since they came to government,” she said.

Senator Hume said the Government needs to be honest about these “fake savings” and the real position of the Budget.

“Under Labor, the cost of living is skyrocketing and, unlike Anthony Albanese and Labor, Australians can’t find extra room in their family budgets through fake savings and fudged accounting,” she said.

Senator Katy Gallagher maintains Labor is on track with its savings plan. Picture: NCA NewsWire/Martin Ollman

“Katy Gallagher and Labor must come clean that Labor’s actual budget deficits are at least $3.6 billion higher than she claimed.”

Financial Minister Katy Gallagher said the government had met its pre-election commitment to reduce reliance on external labour and, in the October budget, $3 billion in savings had been banked to the budget bottom line.

“We are undertaking an audit of employment to identify further opportunities to convert contractor and labour hire roles into (public service) positions, which reduces costs to the Commonwealth,” she said.

“We have also announced an in-house consulting model that will give public servants the opportunity to develop ­expertise, further build relationships, collaborate with colleagues and challenge themselves in new ways.

“This will have the effect of reducing expenditure on external labour.”