Australian governments are now amongst the biggest users of external consultants on the planet.

Our country has seen the privatisation of core government tasks at an extraordinary level over the past decade along with an increase in spending on private service providers that is hard to believe. While decent public sector jobs have languished in number, spending of taxpayer dollars has rocketed upward, with mass outsourcing of key functions like strategy, management, policy development and the design and allocation of entire government programs. This reflects the conservative aversion to the public sector and its enthusiasm for large public troughs of easily accessible dollars for private business.

The Big 4 KPMG, EY, PwC and Deloitte have voraciously fed upon, and energetically enlarged these opportunities. Their take of taxpayer funds increased by more than 1270% over the past decade. They are the masters of manipulating the revolving door (recruiting key public servants into consultancies and back again), strategic placement of secondees and advisors, and the cultivation of initial (often low-balled) contracts into much larger opportunities - the classic land and expand strategy. For consultants where the dollar is king, super-profit trumps public interest at every turn.

A parliamentary report released in August exposed government procurement processes as central to a failing system. Weak procurement structures create real opportunities for the exploitation of the public purse by aggressive contractors given that procurement is such big business: $80 billion in 2021/22. The report from the Joint Committee of Public Accounts and Audit went pretty much straight to the heart of the matter, identifying serious issues that need to be addressed. Its title, Commitment Issues highlights with sardonic humour the failure of public servants to stick to the rules as one of the main causes of government procurement failures.

When the committee looked at audit reports on procurement by government agencies they found 80% non-compliance. And when these transgressions are discovered and reported, those charged with oversight at the Department of Finance routinely do nothing. In practice, management of external contracts has been devolved to the individual agencies who are left to their own devices with nothing to guide them but their own moral compass.

Im not sure if this is a running joke inside the public service but in his foreward, committee Chair Julian Hill likens the Aus Tender procurement platform to an online dating service seeking to match up agency contracts with the most alluring candidate. Public servants need to get much better at playing the field he says as he joke-labels the system Aus Tinder.

In my experience, this critique finds plenty of support from insiders within the Big 4 who regularly brief me on the inadequacy of government management of contracts. They are often poorly specified, with unclear scope, deliverables and expectations. Government managers rarely require detailed personnel/labour time sheets, or clarity about specific types of labour allocations and inputs. As one said to me recently Government managers too rarely impose real probity on the way through a project in relation to scope, deliverables and value for money. Too often this results in a crunch point near project-end which results in expensive variations, very profitable for us, very expensive for the taxpayer. She went on, Too often the government is totally blinkered and outwitted by very smart operators.

It should not be this easy. These informants also point to the failure to allocate contracts on the criteria of value for money, often influenced by past contracting relationships, false claims of credentials or experience, and weak contract management and decision making capability. This is the pointy end of procurement and government needs to be much sharper in its management. But its not all the fault of those at agency level trying to balance the demands of a bureaucracy hamstrung for decades by staffing caps with the pressure to get quick results. This is where value for money falls by the wayside and we get astronomical bills for consultancy work that is not properly monitored or evaluated.

The current inquiry into consultants which I initiated in the Senate in March this year has garnered an endless stream of examples of inappropriate procurement practices. The panel system that narrows the number of bidders for types of work advantages big consultancies over smaller businesses. Too many projects are not subject to competitive bidding at all.

We need to reduce contracting and rebuild public sector capacity. This includes the capacity to design, conduct and evaluate government services across all agencies. We remain a long way from this as illustrated by this weeks announcement of an $8.5million contract to EY to design a new agency to monitor safety issues around government acquisition of nuclear-powered submarines under AUKUS. There is probably no more politically sensitive project than this, but months into a consultancy scandal, Defence finds it appropriate to farm out the design of an entire agency. Surely this is an episode of Utopia? Surely the bright sparks who devised this contract are now washing dishes in a distant tea room?

This week I participated in a Senate Inquiry into the Public Sector Amendment Bill 2023 and listened to Mr de Brewer, the new Public Service Commissioner, explain the four pillars of the Labor Governments public sector reform plan: integrity, putting people at the centre, being a model employer and ensuring public sector capability. It is hard to conceive the letting of this new contract to EY as upholding these pillars.

Utopias script writers owe Defence a debt for their plot pointers. But, this is no laughing matter. A monstrous overspend on consultants, the weak management of procurement processes, the lack of transparency and wasted resources, all betray taxpayers.

Australians want to see a public service run in the public interest with the capability and resources to do the job. The role of consultants should be constrained to specialist support and unexpected levels of demand.

There is a great deal of work ahead to restore capability, integrity, the public interest and decent working conditions to the public sector and part of that work lies in strong investigative work in the parliament. It also relies on resistance to the forces that profit from current arrangements and the rivers of consulting gold, who I am told are hoping the attention of punters and the committees of parliament will run out of puff and the caravan will move on. The Australian public expect better. They deserve it.