Labor to purge $3b APS contractor, consultants bill

Three government entities delivering vital services to Australians are in-line to be boosted by $500 million under the Labor plan to reinvest savings from cutting wasteful use of private external labour.

A purge of contractors and consultants used to perform the work that would otherwise be done by public servants could reap as much as $3 billion in budget savings over four years, the party claimed.

With the savings, Labor is committing to restoring 1080 service delivery jobs at Services Australia, the Department of Veterans' Affairs and the National Disability Insurance Agency.

ALP spokeswoman for finance and the public service, Katy Gallagher, says in government, Labor would abolish the public service staffing cap responsible for increasing job insecurity and waste while eroding capability.

"Under Scott Morrison and the Liberals, the essential public services Australians rely on have endured years of damaging cuts, which have eroded internal capability across the APS," she said.

This was condemning tens of thousands of public sector workers to the risks and stresses of insecure work, she said.

"The last two years have shown just how important it is to have the APS resourced appropriately so that it can meet the needs of and deliver services to the Australian community."

But the government says the idea of saving money by hiring more public servants was "fanciful".

Finance Minister Simon Birmingham hit back at the Labor plan, saying the claimed savings on contractors "are as likely to happen as Anthony Albanese is to fly to the moon".

"The idea that Labor will uncap public service numbers but somehow end up with a saving by spending less on contractors is fanciful," the Liberal senior minister said.

"Once staffing caps are removed by Labor we can be sure that departmental costs across government will simply balloon.

"Remember that the last time Labor were in office they expanded public service numbers by more than 13,000 in their first four years in office."

The Coalition cut more than 12,000 jobs from the APS prior to the COVID-19 pandemic according to the government's official figures.

The APS consultancy bill averages around $2 million every day, having doubled since the Coalition came to power.

Some consultants were charging more than $5800 per day, the public sector union CPSU said, and doing work that APS staff would do for a tenth of the price.

"There are talented staff across the APS who can do the work currently being handed to consultants and contractors," said CPSU National Secretary Melissa Donnelly.

She said the widespread use of consultants undermined the public service role of providing frank and fearless advice and represented privatisation by stealth.

"Ministers like to go to consultants because the minister can be sure they will get the answer they want."