Labor fearful of Industry department ‘privatisation-by-stealth’

Joseph Brookes
Senior Reporter

The federal government is paying a global consultancy firm nearly $2 million for two reviews of the Department of Industry’s commercial operations and corporate services, with the latter to guide potential automation of parts of the department.

The opposition, which uncovered more information about the work late last week, has warned it is another worrying sign of “privatisation-by-stealth” of the public service by the Coalition Government.

Shadow finance spokeswoman Katy Gallagher. Image: Twitter

In June, the Department of Industry, Science, Energy and Resources handed a one-year, $940,000 contract to PwC for input on a review of aspects of commercial operations of the department.

In the following month, the consultancy giant received a second $961,000 contract for a separate review of the department’s corporate services. This review will provide advice on potential “automation” of parts of the Industry Department’s corporate services by mid-November.

The second contract drew scrutiny from Labor, which requested more information from Industry Minister Christian Porter a week after details were published in early August.

In written responses to Labor’s questions on notice provided last Friday, Mr Porter said the PwC review will assess the state of the Department of Industry’s corporate services, including human resource management, financial services and information technology.

“The review will provide the department with an independent view of the current state of corporate service provision, together with a range of options identifying the advantages and constraints of adopting automation and other strategies,” Mr Porter said.

The industry minister said an external consultancy had to conduct the review to ensure an “independent, professional view supported by industry-wide benchmarking data that was not available within the department”.

A report is due to the Department of Industry secretary by mid-November, who will then decide if the review outcomes will be shared outside the department.

According to Mr Porter’s response, the corporate services being reviewed include financial services, communication, governance, legal, audit and assurance, information technology, human resource management and property and protective security.

The contract was awarded to PwC at a fixed price of $961,394 to deliver agreed contract outcomes, meaning the government cannot say how many hours the consultancy will spend on the review.

Shadow finance spokeswoman Katy Gallagher said the opposition is worried about the cost and consequences of outsourcing public service work.

“Labor is concerned by the Morrison Government’s privatisation-by-stealth tactics that have seen the amount of public funds spent on consultancy double since they entered office in 2013,” Ms Gallagher told InnovationAus.

“This over-reliance on outsourcing is not only a huge burden on the public purse, it is slowly but ever surely gutting our Australian public service of its ability to complete work internally and serve the community with its own permanent staff.”

PwC is also involved in another review of the Industry Department under a separate $939,691 contract. This contract was posted as “professional advice” in June but confirmed by Mr Porter as being part of a department review.

The Industry Department declined to provide details on contract deliverables or if the commercial operations review would also provide advice on automation.

A spokesperson for the department told InnovationAus.said it had “engaged PwC to provide professional advice and input into a review of aspects of commercial operations of the department”.

“PwC was engaged because it provides specialised skills and services.”

Do you know more? Contact James Riley via Email.

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