‘Government contracting out its thinking’: Victorian taxpayers forking out $900k every day for external govt consultants

The Allan government has been accused of being “contracting out its thinking” after an analysis of annual reports revealed its total bill for external consultants surpassed $325m.

Victorian taxpayers are being slugged almost $900,000 every day on external consultants.

The eye-watering figure has been exposed after an analysis of every state department and government-funded agency’s annual report, revealing a total consultancy bill of $325,140,666 in the 2023-24 financial year.

The Department of Energy, Environment and Climate Action was the biggest offender, spending a whopping $56.9m on consultants, while the Department of Transport and Planning racked up a bill just under $24m.

Coming in next was the Department of Jobs, Skills, Industry and Regions which spent $13.1m and the Department of Treasury and Finance which set aside more than $10m.

Victoria Police’s final bill came in at $10.4m while Triple Zero Victoria spent $3.9m and the CFA dedicated $2.9m.

Victoria Police’s final consultancy bill came in at $10.4m in the 2023-24 financial year. Picture: NewsWire

V-Line spent a whopping $14.6m on consultants while the Port of Hastings Corporation used services that came in at $12.2m.

The Kardinia Park Stadium Trust spent more than $2.2m, while the Australian Grand Prix Corporation used over $1.3m. Melbourne Market Authority, which has been locked in a bitter rent dispute with its tenants, also spent more than $1.2m.

The total consultancy bill is a decrease on the year prior, but the Allan government is facing calls to rapidly reduce its reliance on external advice as the state’s debt hurtles towards an eye-watering $187.8bn by 2027-28.

The state’s debt is hurtling towards $187.8bn by 2027-28. Picture: NewsWire

Former ANZ chief economist Saul Eslake said it made “perfect sense” to use consultants in some cases, but said the government must consider its reliance given its budget crisis.

“In Victoria‘s current economic circumstances, they should be going through every item of expenditure with a fine toothed comb — and consultants is obviously one of those,” he said.

A spokesman for the Community and Public Sector Union, which represents the state’s bureaucrats, said the Allan government was “addicted to consultants”.

Economist Saul Eslake said the government must consider its reliance on consultants given its budget crisis.

Community and Public Sector Union secretary Karen Batt said the government should be building their in-house capability to save “massive amounts of taxpayer money”.

“Senior departmental managers are addicted to using expensive external consultants,” she said.

“This is more than just big build engineering. This is government contracting out its thinking.

“These consultancy firms are full of former senior public servants and the current revolving door must end otherwise the spend continues and the practice will never end.”

Opposition Leader John Pesutto said Labor continued to spend “hundreds of millions of dollars a year on consultants, despite having presided over a doubling of the public sector wages bill since 2014”.

“Under the Allan Labor Government, taxpayers are not getting value for money from public servants as shortages of teachers, police officers and child protection workers continue to impact frontline services,” he said.

“Labor cannot manage money and Victorians are paying the price.”

A government spokeswoman said spending decisions of independent agencies which receive taxpayer funding are not made by government.

The government has oversight on the ten public service departments and some agencies including Victoria Police, which she said had decreased its total consultancy spend to $152.3m in 2023-24.

“The government uses consultants when highly specialised advice or services are required that is outside the regular remit of the Victorian Public Service,” she said.

“We are continuing to reduce our spending on consultants.”

Originally published as ‘Government contracting out its thinking’: Victorian taxpayers forking out $900k every day for external govt consultants