For decades the creeping advance of neoliberalism has steadily eroded the foundations of our public institutions. Under the guise of economic efficiency, this ideology has promoted the privatisation of public services, leading to a weakened public sector and the transfer of public wealth into private hands. The result is a dangerous pattern where profits are privatised while the public is left to shoulder the losses. One of the most glaring manifestations of this bankrupt ideology is the slavish reliance of governments on external consultants.
Under previous governments the use of consultants skyrocketed, with spending at the Federal government level surging from $470 million in 2012‑13 to nearly $1.5 billion by 2021. Under the previous State Liberal‑Nationals Government, spending on consultants rose by more than 50 per cent from 2011 to 2022, reaching, again, approximately $1.5 billion in the 2020‑21 financial year. Often these consultants, selling themselves as experts, act like mercenaries with no genuine stake in the results, charging exorbitant fees. Many from the big four—PwC, KPMG, EY and Deloitte—are brought in to give advice that is either blatantly obvious or out of touch with reality.
I was witness to this during my brief time as a public servant. Working in the IT space, I was all too often called in to clean up the mess caused by an expensive and unnecessary engagement with one of the big four. The recent PwC tax scandal is a stark reminder of the perverse outcomes that can arise when consultants are allowed to operate without adequate oversight. In that case, PwC leaked confidential government information to assist private clients in evading tax laws, an act that not only betrayed public trust but also highlighted the deep conflicts of interest that are inherent in the consulting industry.
In response to that and other issues, the New South Wales Legislative Council's Public Accountability and Works Committee recently handed down a report into the New South Wales Government's use of consulting services. The findings are alarming, revealing poor procurement practices, overreliance on the big four and significant strategic risks. The report shows that relying too much on consultants is weakening our public sector. By outsourcing key tasks, the Government is becoming too dependent on outside advice. The issue is made all the worse by consultant shopping, where agencies seek outside approval for decisions that could and should be made in-house.
One of the key recommendations from the committee's report is recommendation 14, which suggests the New South Wales Government explore creating an in-house specialty consulting team. That aligns with a recent proposal made by the Australian Government and would dramatically reduce the Government's reliance on expensive and often useless external consultants. Over time, this in-house team would pay for itself by eliminating the need for high consultant fees and fixing inefficiencies in the public sector. Establishing an in-house consulting team would also rebuild vital public policy expertise that has been lost over the years, by attracting top talent from both the public and private sectors. Those sentiments echoed the view of the Public Service Association, which, in its submission to the committee's inquiry, also called for a rebuilding of the New South Wales public service.
The major shift across both the State and Federal government would send a clear message: The days of outsourcing core government functions to external consultants with questionable motives have come to an end. By strengthening the public sector, we can ensure that government decisions are better made, with transparency, accountability and a genuine commitment to the public interest. The committee's recommendations provide a clear path to a more efficient and transparent government. By investing in our public sector, we can reduce reliance on external consultants, ensure value for money and restore integrity in decision-making.
In its short time, the Minns Government has also made significant strides in improving the public service in this State. Chief among them are backing essential workers and strengthening integrity agencies. It has scrapped the public sector wage gap, ushering in pay increases for nurses, teachers and police officers. It has also boosted the funding of integrity agencies by an additional $228.6 million. Those arrangements will ensure that the Audit Office, the Independent Commission Against Corruption, the Law Enforcement Conduct Commission, the NSW Electoral Commission and the Ombudsman's Office remain adequately resourced to continue their work investigating, exposing and preventing corruption and maladministration. They will also ensure that the waste and inefficiency caused by the overuse of external consultants comes to an end and New South Wales can begin to reclaim and rebuild its vital public service.
