The money federal government departments are saving through job cuts is being cancelled out by a massive increase in the costs of high-paid consultants and contractors.
The 18 major Commonwealth departments reduced their wages bill by $109 million last financial year, according to Fairfax Media analysis of their recently released annual reports.
But consultant and contractor costs increased by a whopping $205 million – almost double the money saved. The increase took the departments' total consultant and contractor bills for 2014-15 to a little over $1 billion.
Thirteen of the 18 departments recorded an increase in outsourcing costs.
About half of the overall increase can be attributed to a $100 million Department of Human Services contract to update its creaking computer system. The department also increased its wage bill by $16 million.
Five other departments – Treasury, Finance, Social Services, Immigration and Infrastructure – saved on wages but had their savings outstripped by rising outsourcing fees.
Together, they saved $53 million on wages, but spent an extra $81 million on consultants and contractors.
The 18 departments also spent $78 million on redundancy packages during the year.
These figures refer only to the umbrella departments themselves, not the 90-plus other agencies under their purview.
The figures also do not take superannuation or leave costs into account.
An estimated 15,000 public servants lost their jobs under Tony Abbott's short-lived government. But the new figures suggest the downsizing did not necessarily help the budget bottom line.
They also add to the debate about the increasing outsourcing of public service duties, which some believe has left the bureaucracy bereft of the in-house experience it needs to function properly.
The Community and Public Sector Union's assistant national secretary, Michael Tull, said the public sector had been "cut to the bone".
"That's why 26 million calls to the Department of Human Services went unanswered last year, why the Australian Tax Office doesn't chase more multinational tax avoiders, and why the CSIRO stopped research into Alzheimer's disease," he said.
"Arbitrary budget cuts force departments to use contractors and consultants to replace workers who should not have been made redundant in the first place. It's a classic false economy."
The government's "growing addiction" to multinational consulting firms also raised questions about how much influence big corporate interests had over policy development, he said.
"A properly funded public sector provides impartial advice that is absolutely in the public's interest. It's an essential bulwark against the creeping corporate control over government decision-making."
Malcolm Turnbull said this year, before becoming prime minister, that he did not want the public service further eroded by consultants.
He expressed concerns that too much outsourcing was turning departments into "mailboxes for sending out tenders and then receiving the reports and paying for them".
"What we have to do in government, in my view, is stop panning public servants and do more to ensure that they do their job better," he said.
"And one of the ways to do that is to make sure they do the work that is their core responsibility, as opposed to outsourcing everything."
