The LNP vowed to cap its outlay on consultants to fund promises. It’s still spending

Then-opposition leader David Crisafulli first flagged a crackdown on spending in 2023, promising to prioritise and grow the public sector’s capacity instead.

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The LNP went further in its 2024 election campaign, promising a bolstered in-house consultancy to help “flatten the trajectory” of outsourced spending by $6.8 billion in the government’s first term.

The agency, then-shadow treasurer David Janetzki said, was to be modelled on federal Labor’s Australian Government Consulting – itself based on a failed UK iteration.

Janetzki said a staged cap would see spending stabilise in the 2024-25 financial year at 2022-23 levels (about $3 billion), then dropping to 2021-22 levels (about $2.5 billion) beyond that.

He told journalists at the time that the plan would address the findings and calls of the Coaldrake report into public sector culture and accountability.

“The impact of an overreliance on consultants is circular, in that the more work is outsourced, the less capacity that is developed within,” Janetzki said, partially quoting from the report.

The LNP criticised Labor under Steven Miles and Cameron Dick for its spending on consultants.Credit: Matt Dennien

Then-treasurer Cameron Dick said it was “inherently unbelievable” that the LNP could save more money than federal Labor was planning to do.

Since then, the LNP plan appears to have shifted.

Last April, Janetzki conceded the government consulting office had hit snags, and he promised to have it operational before the end of the financial year.

By the time he delivered his first budget in June, consulting and contracting costs were tipped to total $4 billion across 2024-25 – $1 billion more than the promised cap.

“We propose to stabilise the level of expenditure on consultants and contractors at 2022-23 levels in the first year, and then, in a phased step-back approach, at 2021-22 levels for the rest of the forwards.”

The budget papers did not mention the caps, nor did Janetzki.

Instead, the budget used a reworked estimate of what could have been spent – $4.5 billion – to turn the costings overspend into a $500 million saving. Even this was lower than planned.

Asked in the budget media conference if the government had abandoned its $6.8 billion four-year saving plan, Janetzki said, “those savings will be delivered”.

The budget-outlined position effectively means the government now needs to trim its outsourcing spend by $2.6 billion across each of the next three years, for a total of $7.8 billion, to hit its pre-election target.

Janetzki also used the budget to establish the consulting office as a Queensland Treasury Corporation unit from July 1, with $15 million in funding across two years until it becomes self-sustaining.

It only gained a managing director in early November – Deloitte veteran of 16 years Giselle Hodgson – and is described on its website as still in the “establishment phase”.

Quiggin told this masthead he believed the government’s in-house consulting push should be less about trying to compete – particularly with the big four – than giving departments an ultimatum.

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“It’s really: OK, departments, which would you rather do – maintain your own in-house expertise, go to the government [consulting service], or fly blind?” Quiggin said.

“A line department can’t maintain on tap the kind of expertise that’s needed for a lot of tasks.”

The independent Queensland Audit Office had also pledged to do its bit responding to the Coaldrake report.

Auditor-General Brendan Worrall added a specific report to the office’s work plan in 2023, for release this financial year, probing the effectiveness of public entity outsourcing spends.

But his successor, Rachel Vagg, appointed in August 2024 by Labor, dropped the work from her forward plan, published in June last year.

Vagg’s plan said the topic had been reassessed and was now “better addressed through our annual state entities report”.

A related report into compliance with lobbying obligations, previously due in 2026-27, was also dropped, citing overlapping responsibilities with the Integrity Commissioner and the State Archivist.

Shadow treasurer Shannon Fentiman said Janetzki and the government had broken a promise with Queenslanders and were “burning a hole in the state budget”.

“Queenslanders deserve the independent Auditor[-General] to let the sun shine in on what’s really happening with consultants and contractors under the LNP’s regime,” she said.

Last month, Janetzki revealed a downgraded budget outlook, with the state’s operating deficit expected to take a $400 million hit amid warnings from ratings agencies.

This masthead sent a series of questions to the treasurer’s office about why the planned 2024-25 outsourcing cap was not enforced, whether future caps would be, the consulting office’s status, and the cancelled audit.

A spokesperson said only that the consulting office was delivering on the pledge to rebuild public service capacity.

“As part of the government’s commitment to flatten the trajectory of spending on external consultants and contractors, QGCS is providing independent, cost-effective advice and services to government, and building capacity in the public service to deliver more and better services,” the spokesperson said.

The Queensland Treasury Corporation, through a spokesperson, said the consulting office was “now established”, with 15 roles filled and recruitment well progressed for others.

“QGCS is already providing a range of consultancy services to departments, with initial services focusing on policy analysis and strategic procurement advice,” they said in a statement.

Comment was sought from the Queensland Audit Office.

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