Taxpayers spend $2.5 billion on management consultants

THE Coalition Government has splurged $2.5b of your money on pricey management consultants since winning power and, in so doing, created a phantom public service of private advisers.

Australian Prime Minister Malcolm Turnbull speaks to Special Operations Command soldiers during a visit to Holsworthy Barracks in Sydney. Picture: AAP

NEARLY $2.5 billion of taxpayer money has been poured into the pockets of management consultants since the federal Coalition won power, creating a phantom public service of private advisers.

Spending spiralled to a record $690 million in 2016-17 — three-quarters higher than the consultancy costs in 2012-13, when Labor lost office.

The lion’s share of spending went to the “big five’’ consulting firms, which often poach senior bureaucrats to work as consultants.

Accenture pocketed $1.2 billion in consultancy contracts from 2012-13 to 2016-17, an Australian National Audit Office report ­reveals.

Boston Consulting Group, which once employed Human Services Minister Alan Tudge, was given $78 million worth of work.

Minister for Human Services Alan Tudge was employed by the Boston Consulting Group. Picture: AAP

Consulting giant PwC, which ­recently hired the former head of the Prime Minister’s Office for Women, Amanda McIntyre, pocketed $523 million.

Another $422 million was paid to Ernst & Young — whose federal government and public sector leader, Andrew Metcalfe, is a former Immigration Department secretary and ex-deputy secretary of the Department of Prime Minister and Cabinet.

KPMG snared $620 million worth of government consulting work and Deloitte received $365 million.

During the Coalition’s five-year reign, federal government departments have spent $217 billion buying goods and services from the private sector, including $47 billion last financial year.

The Defence ­Department spent almost half the money, awarding 123,319 contracts in five years.

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Prime Minister Malcolm Turnbull and Chief of the Defence Force Air Marshall Mark Binskin flew into Baghdad, Iraq, on Sunday 23 April 2017. Picture: Andrew Meares

The Department of Immigration and Border Protection spent $15 billion, while the Human Services ­Department and Foreign Affairs and Trade each spent $7 billion.

The war on terror has proven a windfall for defence, law enforcement and ­security contractors, with spending nearly trebling from $795 million to a whopping $2.1 billion last financial year.

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But the Coalition government has slashed spending on IT services, from $10 billion the year it won ­office to $5.7 billion last financial year. Expenditure on “management and business professionals and ­administrative services’’, the core function of the public service, was slashed from $8.5 billion to $5.8 billion­.

But the cost of private health care contracts nearly trebled from $3.5 billion to $9.3 billion.

The federal government’s building and maintenance costs jumped $2.7 billion to $4.2 billion.