Labor promised to cut consultant spending. It's now $756 million a year. They've also set up an in-house advisory unit. They won't say what it costs.
The Coalition had a consulting problem. Everyone knew it. Labor made it a campaign issue.
In 2022, Labor came into government promising to rein in the billions being spent on external consultants, contractors, and labour hire firms. Bring work back in-house. Rebuild the public service. Stop paying $2,000-an-hour for advice the APS could produce itself.
Three years later, APS consulting expenditure hit $756 million in 2024–25. That's up $135 million from the previous year.
The government says it's saved $5.3 billion since 2022. The consultants are still getting paid more than the year before.
How much is $756 million
For context: $756 million in one year is roughly what the federal government spends running the Department of Infrastructure. It's more than Australia's annual foreign aid contribution to the Pacific. It's the kind of number that, written on a department's internal invoice and billed out to a firm charging several hundred dollars an hour, represents quite a lot of policy advice.
But consulting is only part of the story. Broader external labour spending — which includes contractors, labour hire, and related categories — sits at $2.33 billion in 2024–25. Under Labor, that figure has never fallen below $2.2 billion. Not once.
To be fair to Labor: the Coalition hit a peak of $2.4 billion in 2021–22 under the Morrison government. Both parties like to campaign against consultants. Both parties keep using consultants.
The cycle
Here's how it works, roughly.
Government decides public service is bloated or inefficient. Freezes hiring. Loses institutional knowledge as experienced staff leave or retire. Realises it no longer has the in-house capacity to run complex projects or provide policy advice. Hires consultants to fill the gap. Consultants produce a report. Report recommends the government build more in-house capacity. Government agrees. Hires consultants to manage the transition. Repeat.
Independent senator David Pocock, who sits on Senate estimates and has been watching this pattern for a while, noted in 2025 that "consistently high spending on temporary personnel" is hollowing out core public service capability rather than rebuilding it. When the contract ends, the knowledge walks out the door. The next contract starts from scratch.
The in-house unit they won't talk about
In a move that nearly writes the punchline for you, the government established its own in-house consulting unit — Australian Government Consulting — to reduce reliance on external firms.
How much does Australian Government Consulting cost to run?
The government won't say. As of 2025, it has declined to disclose the unit's operating budget.
So: the government created an internal advisory unit to reduce the cost of external advisory. The cost of the internal advisory unit is undisclosed. An external consultancy could probably advise on whether this is a good look. They'd bill for it.
What's being promised
Labor's 2025 election costing, verified by the Parliamentary Budget Office, committed to a further $6.4 billion in savings over four years from reducing consultant, contractor, and labour hire spending.
That's the same government that increased consulting spend by $135 million in a single year.
The PBO doesn't evaluate whether promises are likely to be kept. It just costs them. Consider it costed.
What it actually costs
Setting aside the politics: the real cost of over-reliance on external consultants isn't just the invoice. It's what you don't get.
When policy decisions are outsourced, the expertise lives in a PowerPoint delivered by a firm whose partners rotate off the engagement every six months. The public servant in the room takes notes. The next time something similar comes up, they go back to the same firm and start again.
The public service loses the institutional muscle to push back, adapt, or hold contractors accountable. You end up paying consultants to manage consultants. The bill compounds.
Meanwhile, the senior APS officer who might have built that expertise over twenty years? Their position was never filled. Or it was filled by a labour hire firm at two and a half times the cost.
The government gets to announce savings. The firms get to bill hours. The public gets the tab.
The non-partisan bit
This isn't a Labor problem or a Coalition problem. It's a structural one that both major parties have benefited from and neither has fixed.
The Coalition did it. Labor promised to stop. Both parties have pointed at each other's consultant bills while writing their own cheques. The firms advising both governments have, largely, kept billing.
That's not hypocrisy as an exception. That's the system working as it was always going to work.