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State paid consultants more than $90m in one year

The expenditure on “big four” consultancies increased to $92,948,445 in 2020 compared with $83,985,018 in 2019 – a 10.6 per cent increase, Labor’s analysis shows.

The growing use of consultants in government was examined in the 2019 review of the Australian public service (APS), led by former Telstra chief executive David Thodey.

The review found “consultants are increasingly being used to perform work that has previously been core in-house capability, such as program management”.

“Over the past five years, spending on contractors and consultants has significantly increased while spending on APS employee expenses has remained steady,” the review found.

NSW Labor’s Treasury spokesman Walt Secord said it was “extraordinary” the Berejiklian government increased expenditure on consultants in a year that was plunged into recession.

“The Berejiklian government must explain why it needs to bring in expensive consultants when it has more than 400,000 employees in the public service,” he said.

“The government should be using its own departments and staff to do this work.”

NSW Treasurer Dominic Perrottet delivered a record deficit of $16 billion in the COVID-delayed November budget, with debt to soar to $104 billion in four years.

A key feature of Mr Perrottet’s budget was pushing ahead with his plans to phase out stamp duty.

The government was last month accused of outsourcing tax reform by paying millions of dollars to KPMG to help with the state’s biggest overhaul of duties in decades.

The contract, which began on September 1, was for “a senior and experienced consultant” to work on the tax reform project with NSW Treasury, “responsible for management functions, communications, economic modelling and implementation of the project”.

A spokesman for Mr Perrottet said: “The size, scale and complexity of some work within the NSW government warrants engaging with specialist advisers to ensure the best possible outcomes for the people of our state.”

The Coalition’s budgeted forecast for public service employee expenses for 2020/21 is $37.08 billion, making up 37 per cent of the government’s overall expenses.

But consultants are also a significant expense. “Other operating expenses make up the second largest category (25.3 per cent) and include consultant and contractor fees, and repairs and maintenance costs,” budget papers show.

Other consultancy contracts awarded in 2020 include more than $164,000 for Deloitte to “help reduce parking demand” in residential buildings and almost $350,000 to optimise an online learning module for Transport for NSW.

Deloitte was also given a contract to do a review of “cluster fuel tax credits” worth $357,500 and external consultants were also used to help in the sale of 51 per cent of WestConnex.

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