NSW Labor Announces $450 Million in Consultant Cutting

A general view of construction at the Sydney Metro Southwest Project at Barangaroo in Sydney, Australia, on Dec. 3, 2020. Jenny Evans/Getty Images

The Minns Labor government says it has saved more than $450 million (US$275 million) on consultant and contractor services in its first full year.

Consultant spending across agencies dropped by $72 million, from $130 million in 2022-23 to $58 million in 2023-24.

This reduction follows a New South Wales (NSW) Auditor-General’s report that found the previous Liberal-National Government had spent over $1 billion on external consultants without sufficient oversight.

It also found that the big four consulting firms were increasingly handling generalist tasks for the NSW public sector.

Minns government further claims that the former government issued more than 10,000 contracts in its last five years—effectively one new contract every hour.

Labor has also sought to rein in spending on contingent labour—contractors acting as de facto public servants.

New controls cut this expenditure from $2.1 billion in 2022-23 to $1.7 billion in 2023-24, a 17 percent drop.

The findings of the report, “Building up NSW Public Service Capability and Driving Down Use of Consultants,” released in May 2024, are being revisited.

The renewed focus may also be linked to the Opposition’s ongoing criticism of Labor’s financial management, with claims of reckless spending intensifying ahead of the elections.

Shift Towards In-House Expertise

In an effort to reduce reliance on consultants, the government is setting up a unit within the Premier’s Department to push agencies toward in-house expertise for policy and project development.

Under the previous government, 15 percent of external consultant contracts were for “generalist work”—tasks such as policy design and evaluation.

Estimates say using public sector expertise could cut contract costs by up to 52 percent while also retaining knowledge and talent for future projects.

Acting Treasurer Courtney Houssos defended the move, saying, “There is always more to be done, and the Minns Labor Government continues working to ensure that every dollar of taxpayer money is being spent more efficiently.”

Opposition’s Criticism Over Economic Performance

The Opposition dismissed Labor’s claims of financial prudence, arguing that the government has overseen a sharp economic slowdown.

“The state’s economy is projected to expand by a pitiful 0.75 percent this financial year, a dramatic downgrade from the already bleak 2 percent forecast just six months ago,” the Liberal Party said in a statement.

“These numbers are not just statistics—they are the grim reality faced by families struggling to keep their heads above water amidst skyrocketing living costs, stagnating private sector wages, and soaring housing prices.”

Shadow Treasurer Damien Tudehope accused Labor of mismanagement, comparing its economic performance to that of the Albanese government.

The Opposition also took aim at the Premier’s Department, claiming it was more focused on “creating Excel spreadsheets, spin documents, and talking points” rather than delivering tangible economic benefits.

“But the truth is clear—they have delivered little, while wages are blowing out, and there’s no real infrastructure pipeline on the horizon,” the statement said.