Labor’s Plan to Reduce Waste and Reinvest in the Australian Public Service

  • An Albanese Labor Government will abolish the arbitrary staffing cap which has impacted on services provided to Australians, eroded public sector capability, reduced job security and wasted taxpayer funds.

  • Labor will also reduce wasteful spending on external private labour (contractors, consultants and labour hire) – which has grown rapidly under the Liberals – by $3 billion over four years.

  • Labor’s plan includes a strategic reinvestment of nearly $500 million as part of the first phase of rebuilding capability in the public service – including 1,080 new secure frontline service delivery jobs at Services Australia, the Department of Veterans’ Affairs and the National Disability Insurance Agency which will improve the delivery of services to Australians.

Under Scott Morrison and the Liberals, essential public services Australians rely upon have endured years of damaging cuts to both staff and resourcing.

Prior to the COVID-19 pandemic the Liberals had cut more than 12,000 jobs from the Australian Public Service (APS).

Under Scott Morrison and the Liberals, the essential public services Australians rely on have endured years of damaging cuts, which have eroded internal capability across the Australian Public Service (APS).

Prior to the COVID-19 pandemic the Liberals had cut more than 12,000 jobs from the APS.

At the same time as cutting front-line jobs and agency funding, the Liberals have presided over a rapid increase in wasteful expenditure on private external labour (consultants, contractors and labour hire firms) across the public service to do the work previously done more cost-effectively by public servants.

What's gone wrong?

Wasteful spending on consultants, contractors and labour hire has skyrocketed over the past decade of the Liberal Government.

The Government’s own Independent Review of the APS released in 2019 (“the Thodey Review”) and the Australian National Audit Office have both found that spending on consultants alone has more than doubled since the Liberal Government came to power in 2013 – and that the use of contractors and labour hire has grown at a similarly alarming pace.

This explosive growth is driven partly by the Liberals’ staffing cap policy, which has distorted staffing decisions by agencies for years, promoting a reflexive and expensive reliance on private external labour in order to circumvent the cap.

The Thodey Review identified the Liberals’ staffing cap and growing reliance on private external labour as a key driver in the loss of capability and capacity across the APS. It also raised serious concerns about the value for money achieved through these arrangements.

However, despite the Thodey Review recommending the abolition of the staffing cap to enable agencies to better manage their own resources and achieve cost efficiencies, the Morrison Government continues to impose it.

Analysis of federal government contracts – for services such as consulting, staffing and recruitment – has found the Commonwealth's market in 2020 for "private" or external labour had doubled in just the previous five years, and is now costing taxpayers in excess of $5 billion a year.

The Liberals’ privatisation of the APS by stealth is not only costing Australian taxpayers more – it is condemning tens of thousands of workers to the risks and stresses of insecure work, while weakening transparency and trust in our public institutions.

The details

An Albanese Labor Government will work constructively with the public service and unions to re-build an effective public sector and achieve greater value for taxpayer money.

Labor will abolish the arbitrary average staffing level (ASL) cap which has caused so much damage to agencies across the APS. 

Labor will end the excessive reliance and waste of public funds on contractors, consultants and labour hire companies for work that can be done more effectively by public servants. Labor will begin by reducing wasteful spending on external labour by 10 per cent in the first year. This sensible reduction will generate savings of $3 billion over four years.

Labor will also conduct an audit of employment within the APS and, as a model employer, take steps to create more secure employment where temporary forms of work are being used inappropriately.  This will include converting labour hire, casual or contract roles into ongoing APS jobs.

In recognition of the degradation of capability in the public service under the Liberals, our plan includes a nearly $500 million reinvestment as part of the first phase to rebuild the capacity and capability of the APS, with further work to be done in government.

This includes an immediate investment in 1,080 frontline service delivery jobs in key agencies, including 200 staff for Services Australia, 500 staff for the Department of Veterans’ Affairs, and 380 staff for the National Disability Insurance Agency.

These agencies have been identified for investment as a matter of priority to urgently address the deficiencies occurring under the Liberals in these key areas of government service.

Labor’s Plan to Reduce Waste and Reinvest in the Australian Public Service complements and extends upon the previous commitments made as part of the Labor’s Plan for Secure Australian Jobs.