LNP firm charged with cost-cutting still not set up

Treasurer David Janetzki has made a stunning admission about the $757 million the government has promised to save as the deadline draws closer.

Treasurer David Janetzki has just 72 days to save the $757m he promised.

• Editor: Spending fail may be costly

The state government has been forced to admit that an internal consultancy firm tasked with saving $757m will not be established before the end of the financial year, throwing into doubt its key election pledge to drive down debt before the July 1 deadline.

Treasurer David Janetzki has just 72 days to save the $757m he promised – but he has revealed the in-house firm won’t be set up by then and, instead, departments have been directed to “implement greater scrutiny of current and future engagement of consultants and contractors”.

While it won’t be known if that strategy will achieve the savings goal until the state budget is delivered in June, new figures show government spend­ing on consultants and con­tractors has soared past $3.7bn despite repeated promises to reduce the eye-watering sum.

In the LNP’s election costings before Queenslanders went to the polls in October, the party pledged to save $757m in the 2024-25 financial year alone by establishing in-house firm Queensland Government Consulting (QGC).

According to the costings, the firm would “offer a world-class source of quality advice, support and capability building across the Queensland government”.

Mr Janetzki now admits that QGC will not be established this financial year, putting those savings in doubt.

“The Crisafulli government’s first budget will establish QGC, which will build the public service to deliver the advisory services and the infrastructure that Queensland needs,” he told The Sunday Mail.

“Treasury has directed that line agencies implement greater scrutiny and regular monitoring of trajectory growth which will be undertaken across the forward estimates in keeping with the Auditor-General and Coaldrake Review recommendations.”

Queensland Auditor General Rachel Vagg

It comes as Auditor-General Rachel Vagg revealed spending on contractors and consultants increased by $474m in 2023-24. The figure is $1.1bn higher than 2020-21, when the former government trumpeted its effort to find savings. In May 2021, Labor treasurer Cameron Dick said $367m in savings was achieved over the previous 12 months “through reductions in agency expenditure on travel, contractors and consultants and other supplies and services”.

However, spending on consultants and contractors has since soared. Opposition Treasury spokes­woman Shannon Fentiman said Mr Janetzki had promised to “defy basic accounting” logic by reducing debt while taxing less and not cutting projects. “He knew he wasn’t going to deliver on that promise but said he would anyway,” she said.

“This report shows what David Janetzki always knew – he wasn’t going to reduce debt.

“He is also destined to break his promise to voters that QGC would cut $757m in consultancy fees by June 30 this year, because it hasn’t even been set up yet.”

Ms Vagg also predicts net debt “will increase over the coming years” to support Queensland’s $130bn building program.

Originally published as LNP firm charged with cost-cutting still not set up