Australia’s federal government has begun reducing its reliance on external contractors, marking a shift in how the public sector operates.
Under Prime Minister Anthony Albanese, the government has moved to limit outsourcing and rebuild capacity inside the Australian Public Service (APS).
According to data referenced in the opinion article, the federal government spent about $20.8 billion on external labour in 2021–22, including consultants, contractors and labour hire.
The Albanese government has since taken steps to reduce that spending and convert some contractor roles into permanent public service positions.
A new Strategic Commissioning Framework has also been introduced to ensure core government work is performed by public servants unless there is a clear reason to outsource.
The government has also lifted the staffing cap in the APS and invested in areas such as digital capability, cybersecurity and data expertise.
However, according to Emmanuel Josserand, a management professor and researcher at the University of Sydney Business School, rebuilding public sector capability will require more than simply reducing consulting costs.
He argues that decades of outsourcing weakened institutional expertise and reduced the ability of the public service to provide independent advice to government.
Josserand also notes that many government agencies still face difficulties attracting skilled workers, particularly in areas such as digital technology and complex program design.
Slow recruitment processes and uneven career development pathways have also made it harder to rebuild expertise inside the APS.
Examples cited include issues with the Bureau of Meteorology’s website redevelopment, where outsourcing challenges highlighted capability gaps within government agencies.
Some services also continue to rely on external providers, including certain ATO call centres and Centrelink phone services.
Josserand writes that the political debate around public service reform reflects different priorities.
The Greens have argued the reforms do not go far enough and have called for deeper rebuilding of the public service.
Meanwhile the Coalition has emphasised efficiency and warned against expanding bureaucracy.
Independent senators such as David Pocock and Jacqui Lambie have focused on transparency and the long-term health of Australia’s public institutions.
According to Josserand, there is broad agreement that the public service cannot continue operating in the same way as in the past.
But the long-term challenge will be whether Australia can move beyond political debates and develop lasting expertise within government institutions.
