Federal Budget to focus on steering APS programs away from the private sector

Tuesday’s Federal Budget is expected to outline more clearly the government’s strategy to reduce its reliance on external contracts and consultants in the Australian Public Service.

Beyond Labor’s aim to cut the massive spending on consultancy work, there are whole programs currently being outsourced that have attracted the attention of the government’s number crunchers.

Region understands the budget will highlight tentative steps the government is taking to increase the capacity of the APS to deliver more programs in-house.

A number of programs across portfolios are being steered away from the private sector when it comes to how they are delivered.

“It’s a big task to unravel a lot of these programs and remove them from the grips of the private sector and external delivery methods, so much of what will be revealed are first steps only,” a government source said.

“You could maybe look at it as an extension of what the government is doing with consultancies, but it’s actually also a thing of its own.

“This is the delivery of some actual programs the government hasn’t delivered itself for some time now.

“Not all of them will be affected, of course. Not by a long shot.”

On consultants specifically, the budget being handed down by Treasurer Jim Chalmers on 9 May will also point to some of the next steps in Labor’s plan to slash what it described in opposition as a $3 billion consultancy bill.

After winning government, Finance and Public Service Minister Katy Gallagher explained how that figure was calculated.

“That was work we did in opposition based on the information we could elicit through questions on notice and processes like this about what the overall spending was,” Senator Gallagher told a Senate estimates hearing in February.

“It was informed by questions on notice about the cost of labour-hire at a particular level versus a permanent employee at a particular level.

“We did that as part of our costings process. We took the decision to make it that figure, and it was essentially … a percentage reduction over time.

“So a 10 per cent reduction in year one and a 12.5 per cent in year two and up that way.”

Tuesday’s budget also includes significant spending to upgrade a number of national institutions located in Canberra.

Questacon is getting a $60 million windfall to help boost national pride in Australia’s home of technology and science.

The funding, already announced, will support critical property upgrades to maintain visitor safety and also be channelled towards more interactive experiences for visitors.

Region understands that the High Court will be among the other national institutions to receive budget money – primarily to fix a leaky roof.

A plan to legislate a new national Net Zero Authority is another Federal Budget measure.

The government announced on Friday that the authority will have responsibility for promoting the “orderly and positive economic transformation” associated with achieving net zero emissions.

Its aim will be to support workers in emissions-intensive sectors to access new employment, skills and support; coordinate programs to support regions and communities to attract new clean energy industries; and help investors to engage with net zero transformation opportunities.

The first step for the government will be to establish an agency from 1 July this year, initially housed in the Department of Prime Minister and Cabinet.

The agency will provide advice to the government on the final design and establishment of the legislated National Net Zero Authority.

The budget will also provide additional funding from the $1.9 billion Powering the Regions Fund to support existing industry – such as rail and aviation – and new clean energy industries, with the creation of a $400 million Industrial Transformation Stream.