Consulting inquiry sets sights on ‘pseudo-APS’ labour hire
Reform is needed to help plug skills gaps following the Albanese government’s shift away from labour-hire arrangements.
At a parliamentary hearing on Thursday, BCG managing director Miguel Carrasco warned against potential conflicts of interest caused by the government’s engagement of external staff.
Mr Carrasco said the Australian Public Service should limit its external engagements to consultants or labour-hire arrangements, “but not both ... having people inside an organisation doing pseudo-APS roles creates a risk of exposure.”
The Albanese government is reducing its reliance on external labour after an audit by the APS Commission and the Finance Department found the former government had spent $21 billion on external labour from 2021–2022.
In that same period, the Morrison government engaged 53,911 external staff, comprising over a third of the APS workforce.
At the time, Minister Katy Gallagher said “there is a role” for external labour in the APS but that it should be used to “provide a clear value add and not simply plug holes.”
Given resourcing constraints, skills imbalances, and staffing caps, the APS has long engaged workers on a labour-hire basis. Professor Andrew Podger said that while the Albanese government removed staffing caps and has cut spending on labour hire, it will take time to make the APS more autonomous.
“The use of labour hire and contractors has been reduced over the past year, but it will take time for the APS to rebuild capability so that it can fully take up the slack,” he said.
Mr Carrasco appeared to believe that private consultants have a role to play in equipping the APS with the capabilities it needs to smooth the transition. He explained that BCG delivers its government services “in a way that builds capability.”
“There is good reason to not just do the project but to build capacity internally through training, bootcamps, knowledge transfer sessions, etc,” he added.
The APS has been under increasing pressure to better regulate potential conflicts of interest since an investigation found a startling lack of quality in government contract awards to the tune of $374 million.
Of the 95 contracts captured by the investigation, 19 were flagged for further investigation given concerns around their record keeping and dollar-return value.
Government Services Minister Bill Shorten said the public “do not expect to have substandard procurement arrangements and no conflicts of interest declared or disclosed.”
In a letter accessed by The Guardian on Thursday, APS commissioner Gordon de Brouwer told department heads the government must “strengthen our approach to the declaration and management of conflicts of interest by senior leaders.”
As noted by Senator Claire O’Neill the consulting inquiries are just as concerned with the practice of private service providers to the government, as it is with the APS.
EY and PwC have been criticised for failing to declare conflicts of interest in their dealings with the federal government.
