‘Wasting money’: Consultants rake in $2m for ‘core’ industry dept work

Denham Sadler
National Affairs Editor

The industry department will pay two US consulting giants nearly $2 million in just over a month for “core” department work, with the public sector union saying this is “wasting money” and “undermining” the public service.

The Department of Industry, Science, Energy and Resources paid Boston Consulting Group nearly $400,000 for just a week’s work in September to provide advice on its “support offerings”.

In the same week, a contract was made public revealing the department would pay fellow consulting giant McKinsey $1.3 million across just over a month to advise on the use of technology to reduce emissions.

Industry, Energy and Emissions Reduction Minister Angus Taylor’s department has been using consultants for “core” services.

Both contracts relate to core industry department work and have been labelled by the public sector union as “wasting money and undermining the role” of the public service.

“These latest [industry department] contracts are a further example of something we are seeing time and time again: government using external consultants for work that the public service can and should be doing,” Community and Public Sector Union assistant national secretary Michael Tull told InnovationAus.

“It is wasting money and undermining the role and standing of the public service for the government to be contracting this work out.”

The contract with Boston Consulting Group was worth $385,000 and ran from 16 to 24 September – just seven working days. It was listed as merely being for “professional advice”.

An industry department spokesperson said the consultant was engaged to “provide specialist professional advice to ensure support offerings meet objectives and deliver for industry”.

McKinsey will be paid $1.3 million from 27 September to 8 November by the department for “professional services”.

The spokesperson told InnovationAus this work related to providing “specialist professional advice and analysis on the potential for technology to reduce Australia’s emissions”.

It comes just weeks before the Glasgow climate summit, and as Prime Minister Scott Morrison is in negotiations with the Nationals to reach an agreement on a net zero pledge.

Mr Tull said this important work should be done internally in the public sector.

“There is substantial expertise in the public sector on emissions reductions and we’ve seen detailed recent reports on the issue from CSIRO and others,” he said.

“These issues around the use of consultants are serious at any time but especially for such politically charged topics like climate change and emissions reductions.”

Earlier this year, the industry department entered into two contracts worth a total of just under $2 million with PwC to review aspects of its commercial operations and corporate services, including potential automation of parts of its operations by the end of the year.

According to the opposition, this was another worrying sign of “privatisation-by-stealth” at the department and in the wider public service by the Coalition government.

The over-reliance on consultants by the departments is also concerning in terms of the type of advice being provided, and the lack of transparency on this advice, Mr Tull said.

“Ministers like to go to consultants because the minister can be sure they will get the answers or outcomes they want. That of course is deeply at odds with our system of government, whereby the public service is charged with providing frank and fearless advice and can mean the minister gets good advice and not just the advice the minister wants,” he said.

“The other issue here is about transparency. To be blunt, it is easier for government to bury a consultant’s report than to hide departmental advice. Departments have to front up at estimates [hearings] and the consultants do not.”

Last week, the Australia Institute released new analysis showing that the federal government is spending $1 billion each year on consultancies, funds which could create an extra 12,000 public sector jobs.

The organisation called on the Senate to use its powers to require these consultants’ reports prepared for government to be tabled in Parliament and made public.

“Compelling the work done by consultancies to be public would be an improvement on the status quo, although there is still the underlying issue that consultancies are doing an unprecedented amount of public work,” said Bill Browne, the report’s author and Australia Institute democracy and accountability program senior researcher.

“While such an order would not resolve all problems with the spiralling reliance on consultancies, it would serve as a significant first step.”

Do you know more? Contact James Riley via Email.

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