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December 1, 2025
Commonwealth spending on external consultants has surged despite the Albanese government's push to save billions of dollars and bolster capability within the Australian public service, a new analysis reveals.
The Canberra Times crunched the numbers on published federal tenders and found that APS-wide spending on consultants tipped $756 million in 2024-25, a spike on the previous year of about $135 million.
Opposition finance spokesperson James Paterson seized on the figures to attack the government, saying consulting expenditure under Labor was "as high as ever".
"Labor has said for years they need to increase the number of public servants so they can reduce the costs of consultants," Senator Paterson said.
He called on Finance and Public Service Minister Katy Gallagher to "front up and explain why the Albanese government is increasing spending on consultants when they promised the opposite".
This masthead analysed AusTender data over the past decade, examining the total value of external labour contracts awarded over the period and any amendments.
For multi-year contracts, which made up a small portion of tenders, an average monthly value was used to provide the most accurate estimation possible of annual spending, as yearly breakdowns were not reported.
ACT independent senator David Pocock said the "consistently high spending on temporary personnel" was a sign that "core capacity is being hollowed out rather than strengthened".
The use of external labour extends beyond consultants. The analysis found that contracts awarded to a broad range of temporary personnel services, including labour hire firms, contractors and some consultancies, increased by $70 million to $2.33 billion in 2024-25.
This spending has not fallen below $2.2 billion a year since Labor won government, after reaching a high of $2.4 billion under the Coalition government in 2021-22.
Since 2023, agencies have been directed to reduce the use of external labour and move core APS work in-house through the government's strategic commissioning framework.
After the Finance Department recently wrote to agency heads directing them to find savings of up to 5 per cent, the Community and Public Sector Union warned that "arbitrary cuts ... inevitably result in job losses" and urged the government to instead focus on reducing outsourcing.
"The job of addressing the use of contractors and consultants to do core public sector work is far from complete," CPSU National Secretary Melissa Donnelly said.
"There is significantly more to do ... There are still substantial savings to be made insourcing public sector work [and] this is where government must direct its attention."
Treasurer Jim Chalmers told reporters in Canberra on Wednesday that the Albanese government had "worked very hard to turn external contractors into public servants, because you get more value for money that way".
"That work is ongoing," Dr Chalmers said.
Since winning government in 2022, Labor says it has saved $5.3 billion of spending on non-wage APS expenses including consultants, consultants and labour hire, as well as other expenses like travel and hospitality, with a further $6.4 billion in savings promised over four years from 1 July 2025.
The government directed agency heads earlier this year to slash $800 million from their collective 2025-26 budgets to deliver on these commitments.
Senator Gallagher has criticised the former Coalition government for operating an external "shadow workforce" to artificially keep APS headcounts low.
On Tuesday, she said the Albanese government had in 2022 inherited a bureaucracy that was "in terrible shape" and "had been hollowed out".
"The public service was in terrible shape when we came to government," Senator Gallagher said.
"It had been contracted out. We have turned that around in the first term by employing ... permanent public service jobs and reducing the use of consultants and contractors. And we will continue with that approach."