Another week, another report of dubious behaviour at the big consulting firms working in Australia.
There’s been a plethora of headlines about how the big four consulting firms — EY, Deloitte, KPMG and PwC — have infiltrated the Australian public service for mega contracts.
Earlier this week, ABC’s Four Corners program did a deep dive into the issues that have been raised in multiple media reports and government investigations.
In Australia, government contracts for these consultancies reportedly jumped 1276 per cent over 10 years to $605 million in 2022, with the Commonwealth spending more than $8 billion across the decade.
In fact, Australia’s spending on consultants is among the highest in the world.
The explosion in the number of consultants followed a cull of 15,000 public servants after the Abbott government came to office in 2013, when a cap on recruitment was also imposed.
Former Prime Minister Scott Morrison took it to a new level in 2019, saying the buck stopped with him and all his ministers, not public servants. He then went on an outsourcing spree to, in fact, getting most of his key advice from those big four.
According to the ABC report, spending on the large consultancy firms is now six times higher than it was a decade ago.
What it means is that instead of Commonwealth using its own capabilities it has spent billions on consultants. And, woah, have they been raking it in.
One example used was KPMG, which reportedly won 4000 contracts totalling $1.63 billion in the 10 years to 2023.
I congratulate my Labor colleague, Senator Deborah O’Neill, is saying “enough”. She is asking the tough questions about the big four in the Parliamentary Joint Committee on Corporations and Financial Services.
As Senator O’Neill said: “These companies that once traded just in audit, have spread so far across society and into government, their tentacles are everywhere, they now consider themselves the power with a government beneath it, a government that they control and have power over.”
The joint committee has heard evidence from a KPMG whistle-blower Brendan Lyon who said the culture at KPMG was driven by sales at any cost and influence within government. Lyon himself was bullied and intimidated because he refused to obscure the truth in a report for the NSW Government.
The absence of integrity and lack of care with taxpayers’ money is frightening.
The Albanese Government is returning the oversight to the APS.
Finance and Public Service Minister Katy Gallagher has created the first audit of employment, directed savings on external labour to all agencies, established an in-house consulting function and created a commissioning framework.
My hope is that we transform the APS. Making it a place where ideas and big thinking are encouraged and embraced.
A place people are drawn to as a career choice because it offers the opportunity to innovate and make the lives of Australians simpler.
And in my own portfolio of Government Services, my hope is to see that we improved the way Australians interact with government.
Not only that but, through our determination to be citizen-centric, we restore faith in government’s role as a servant of the people.
There is a book I’m reading at the moment called Recoding America, by Jennifer Pahlka, former Deputy Chief Technology Officer of the United States.
Pahlka now runs a non-profit that believes government can work for people in the digital age.
Pahlka tells the story of being brought in by the Californian government to help with the processing of unemployment benefits during the pandemic.
In speaking with one claims assessor, she asked about how they might improve the process to clear the backlog of 1.2 million claims.
The assessor said he wasn’t sure he could answer all her questions because “I’m the new guy”. He’d been there 17 years. He said to get the information she needed, she’d have to speak to the staff who had been there for 25 years.
This happens in Australian government agencies too, with many locked in to long contracts with big tech providers that put layer upon layer of software so it resembles an archaeological dig to find the origin of the process.
And that results in building complexity into customer service.
The way of the future is greater flexibility and shorter, more contained initiatives that are what we call mission focussed — designed to achieve a particular goal.
What that means is we need to build greater capability within the Australian Public Service.
We can invest in tech for government services but what we really need is to invest in tech people who speak the language, who have the knowledge to know the benefits and limitations of a particular software program. Otherwise we can end up with our tech uptake being what a software vendor tell us we need — based on their profit margin, not necessarily the best for the mission.
In two budgets we have increased the public service by about 19,000 people, including converting external labour positions which saves $810 million over the next four years.
We inherited a public service hollowed out by the Coalition. Labor is rebuilding it.
This opinion piece was first published in The West Australian on Thursday 10 August 2023.