The role of big consultants in government
All over Australia there are people who write applications for public money, and they must be asking questions about a huge swindle that has been growing over the past two decades under our noses.
In one world, if successful, these grants are subject to staged payments dependent on evidence of progress. When they end, final reports are required, showing how funds were acquitted, and demonstrating outcomes.
But there is another world: the alternative universe of big consultancies doing government work.
A recent audit found that in 2021/22 close to $21 billion was spent by the Australian Public Service on external contractors and consultants.
In Victoria, Labor spent almost $1 billion over their eight (8) years in government. Similar spending situations occur in other States
This is a world where very large sums of public money are paid to big consultants for sometimes very vague projects.
Outcomes are often unclear and unavailable for public scrutiny, and very large ‘variations’ to projects frequently follow initial allocations. In this world, consultants employed to deal with a problem often come up with solutions that require – surprise – more consultancies, or perhaps create opportunities for profit for their client list. This is an opaque world of ‘partnerships’ without public accountability, and one where the big consultancies make large political donations.
According to the Centre for Public Integrity, the Big Four consultants PwC, KPMG, EY and Deloitte donated $4.3 million over the past decade to the major parties. Their ‘investment’ paid off big time with a 400% increase in federal business over the decade.
PwC was the biggest donor: $2.1 million from July 2012 to June 2022.
These organisations rub shoulders with decision makers at expensive elite events and rotate through the revolving doors that connect the consulting and political worlds.
They live in a dense ecology of relationships that shape political decisions and capture the state. They are paid a great deal and retire on very large ongoing income streams, and many politicians leaving parliament, join them.
Successive Australian Governments have drunk this cool aid in very large gulps – a $21 billion gulp in 2021/22.
They are milking profit from work that would be properly conducted by a robust public sector.
Procurement, outcomes, conflicts of interest and value for money are not properly scrutinised. They are a far cry from the kind of probity that ordinary Australians and smaller organisations are subject to.
Every Australian who has sweated over a grant for a modest sum, or who pays taxes and thinks they should get value for money, must be asking questions about a huge swindle that has been growing over the past two decades under our noses. A swindle that has been fostered by governments of both political colours – and which pays significant sums into their election budgets.
Is it necessary to say that not all consultants are bad? I hope not.
Good consultants must share the outrage of ordinary Australians at what we are seeing – and its contamination of their craft.
There is a role for deep expertise to fix public problems.
The public sector is not perfect (and it is certainly very lean after years of ‘efficiency’ dividends – while consultancies flourished). But to pay consultants extraordinary sums to craft core policy while failing to manage conflicts of interest or to transparently evaluate outcomes, and at the same time to allow them to curry political favour through donations: these are costly failures of governance.
We need new forms of control and accountability, and public sector management of the big consultancies if we are to put a stop to tax-payers like nurses, teachers, public service and retail workers – and all the community grant writers, so tightly held to account – from financing the super-profits of the captains of consultancy.
I hope our Senate Inquiry will continue to throw light on what has happened, what needs to change, and how we get there. It is certain: our parliament needs to act.
Senator for South Australia