Labor says it will axe public service staffing cap to fix ‘stunning false economy’ | Australia news

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Labor will commit to abolishing the public service staffing cap, declaring it a false economy where one saving on public servants ends up costing taxpayers much more in consultants and contractors.

The shadow finance minister, Jim Chalmers, will make the commitment in a speech to the Australia and New Zealand School of Government on Thursday, where he will pledge to rein in wasteful spending on contractors and consultants.

The commitment from Chalmers on Thursday follows a decision by the ALP to end, if the opposition wins the next federal election, the national disability insurance scheme staffing cap, which disability advocates say forces the scheme to rely on contractors and outsourcing, leading to delays and confusion.

There are currently mandated caps on public service employment as a method of containing costs in the bureaucracy. Chalmers contends the practical effect of the restraint on headcount has been to more than triple labour hire spending in the public sector, which is up from $307.6m in its first year in 2013-14, to more than $1.1bn in 2017-18.

“The finance minister has tried to argue these numbers on his own website aren’t reliable,” Chalmers will say, according to an extract of the speech circulated in advance of delivery. “If that is the case, he needs to fix his own site or make the amount of government spending on contractors and consultants more transparent.

“The Liberals are responsible for a stunning false economy, where one saving on public servants ends up costing taxpayers much more in consultants and contractors.”

Chalmers will point to a growing number of contracts for management, business professionals and administrative services in the public sector, and declare “it’s not a radical idea to say that public service work should predominantly be done, where possible, by public servants”.

“Agencies will have to ensure APS employees take on a greater role in IT projects. We will save taxpayers hundreds of millions of dollars that would otherwise go to consultancy firms for work that public servants with expertise and experience can – and should – do.”

He will also pledge to make spending on external consultants transparent. “Under our plan, government spending and procurement data will be collected on a central database, including contract reporting and consultancy spending, and we’ll require agencies to keep records of subcontractors used.

“We will clearly define contractors and consultants and establish broader categories to ensure all data is adequately captured and transparently reported.

“Future governments won’t be able to hide what this government has hidden”.

Chalmers will also use the speech to welcome a wide-ranging review of the public service initiated by the head of the prime minister’s department, Martin Parkinson, but say the review should not be “used as a stalking horse for more ideologically motivated cuts to services, or as an excuse to delay much-needed action to get the public service back on track”.

The shadow finance minister met recently with the former Telstra chairman David Thodey, who is undertaking the APS review, to express Labor’s views, and Chalmers says he is “keen to make the most of it so it’s useful to both sides of politics”.

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