(Image: Wikimedia)

Canberra is crawling with consultants. Since the start of the pandemic, more than $1 billion has flowed out of the public service and into the hands of the world’s seven biggest consulting firms. It’s a trend that has had Australia become one of the most outsourced governments in the world. But Australians are often in the dark over what they’re paying for. 

In the past month alone, the government has handed out more than 540 contracts worth $286 million under the catch-all term “management advisory services”. It’s a phrase that litters the government’s AusTender website — a site that is supposed to provide transparency over Commonwealth contracts but too often adds more opaque jargon. 

So what are management advisory services and do we deserve to know more about these contracts? 

Australians in the dark

“Management advisory services” is one of 12 procurement areas that the government is required to declare under the Public Governance, Performance and Accountability Act 2013. But there is no single definition for the term and it can be used to refer to almost anything — from financial modelling to policy development. 

Transparency International director Russell Wilson says the term has been exploited to hide important details of government work and means Australians are missing out on seeing what public money is being spent on. 

“A lot can be hidden under the procurement label ‘management advisory services’,” he said. “It’s a bland expression that really obscures a lot of government expenditure … including important and sensitive government work, which is not seeing the light of day.” 

The big winners

Much of the federal government’s consulting work is outsourced to the big four accounting firms — PwC, KPMG, EY and Deloitte. But McKinsey, Boston Consulting and Accenture have all taken a bigger slice of the pie in recent years. Last year McKinsey and Boston Consulting were the biggest winners of the government’s pandemic recovery spending spree. Smaller consulting firms have also been reaping the rewards of government largesse. 

But the rise in the number of contracts going to consultants has not been matched by a rise in transparency. In the past month alone, dozens of multimillion-dollar management advisory contracts have been handed out with little detail about what the contracts are for. This includes: 

  • A $7.1 million contract from Services Australia to Callida Consulting with the description “business advisory services”
  • A $5.4 million contract from the Department of Infrastructure, Transport, Regional Development and Communications to Ernst & Young with the description “consultancy services” 
  • A $6.9 million contract from the Department of Defence to PwC with the description “project management”. 

We know very little about these contracts, including what the terms of the particular agreements are or whether they are being met. And while some information may be accessible to the media or through FoI, there is almost no information available to the public. 

“There needs to be changes to reporting, especially when you have very large amounts of money under generic headings,” Wilson said. “The effect is that it is far less transparent.”