Tehan’s taskforce and the million-dollar McKinsey mystery

Joseph Brookes
Senior Reporter

Trade minister Dan Tehan has declined to provide almost any detail about a lucrative contract his department awarded to global consulting giants McKinsey last year, with the Opposition slamming it as part of a Coalition trend to reduce the Australian Public Service to being “merely a secretarial service to minister”.

In October Austrade gave McKinsey a $1 million contract for advice on a simplified cross-border trade digital roadmap.

The work was outsourced just a few months after the creation of a new digital trade taskforce working on the same project and reporting directly to the minister on deregulation and technology strategies.

Trade Minister Dan Tehan

Labor sought more details on the McKinsey contract, including specific outputs, hours the consultants would work, and why the work could not be done in-house by Austrade.

But Mr Tehan declined to provide any specifics, saying only that McKinsey is providing “specialist strategic expertise and support” on the trade and technology project. The minister said any outputs would be provided to the standalone taskforce he oversees, which is receiving only “administrative support” from Austrade.

Asked to provide an expected cost and hours breakdown of McKinsey’s work, the minister would only say they had been engaged for three months and the total contract price is $1,001,000 – both previously published in tender documents.

But public details of McKinsey’s contract now show it will run for six months and finish in April.

Shadow finance and public service minister Katy Gallagher slammed the minister’s response, warning it was part of a pattern of opaque outsourcing undermining the Australian Public Service.

“The Coalition government has systematically gutted the APS of its capability over the last eight years. This has been a conscious decision to reduce the APS to being merely a secretarial service to ministers,” Ms Gallagher told InnovationAus.

“This contract is a great example of this approach, where a nearly $40m taskforce has to outsource all the strategic and policy thinking and the Department is left to providing ‘administrative support’.”

Mr Tehan announced the creation of the Simplified Trade Systems Implementation Taskforce last year to look at helping exporters boost productivity and save time and money by reviewing international trade regulations and modernising outdated IT systems.

The taskforce is led by former Digital Transformation Agency chief Randall Brugeaud alongside Austrade officials. The agency continues to recruit for various roles within it, including policy advisors. The job listings state the taskforce is an independent entity reporting directly to the minister, but receives corporate and administrative support from the government agency.

The Coalition provided $37.4 million over three years to the overarching Simplified Trade System project, with the vast majority of this to be spent in 2021-22. This funding is for the modernisation and improvement of Australia’s trade system, including regulatory processes and tech systems.

Ms Gallagher said McKinsey’s contract is a worrying example of more core department work being outsourced.

“It’s a sad and sorry state of affairs when the APS becomes so diminished through lack of leadership, lack of investment in resources and people, and eight years of habitual and expensive outsourcing that it is no longer able to perform its core function of providing policy and strategic advice to government in the national interest.”

In the MYEFO update a further $32.1 million was allocated to “deliver options to enhance cross-border trade alignment and data sharing and to coordinate reforms across government”.

Update: A spokesperson for the Simplified Trade System Implementation Taskforce said the group includes “officers from government departments, such as the Department of Home Affairs, Australian Border Force, Department of Agriculture, Water and the Environment, Department of Foreign Affairs and Trade, Department of the Prime Minister and Cabinet, Department of Finance, Austrade, Department of Industry, Energy, Science and Research, among others”.

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