Consultants are taking taxpayers to the cleaners

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[They're right in referring to consultants as the 'phantom public service.' This has been going on since the 1990s. Like the revolving door between Wall Street and the White House, this typically involves cutting people's jobs then bringing them back on contract at a large multiple of their previous salary. Having grossly wasted your tax dollars, the managers then piously report to their superiors on how much more efficient their reduced workforce is. *RON*]

Leith van Onselen, Unconventional Economist / Macrobusiness,com, 22 June 2017

Back in September, Michael West reported how the Big Four accounting firms have taken corporate welfare to an extraordinary level, earning up at least $2.6 billion in fees from the Australian government over the past ten years at the same time as they advise multinationals on how to avoid paying tax.

It was a theme also picked up over at Fairfax, which revealed that while the Abbott Government was busy slashing the public service, the Big Four accounting firms cashed in:

Today, Adam Creighton has repeated the dose, noting the hyper-inflation of consultants since 2012, many of whom are sucking at the taxpayer teat:

The ranks of the phantom public service have been steadily expanding, and governments should tell the public by how much…

The number of “management and organisation analysts” in Australia — an occupation category that includes management consultants — has grown by 8000 since 2012 to about 60,000, according to the Australian Bureau of Statistics.

The share ultimately dependent on government money is probably high. Australian state and federal governments spent $1 billion in 2015, 7.5 per cent more than a year earlier… Governments were their third biggest source of revenue, in fact…

State and federal governments should make their spending on consultants more transparent, rather than squirrelling different spending away in the appendices of departmental annual reports.

The growth of consultants reflects a broader dereliction of duty by political and corporate leaders, who either can’t make a decision or want to blame someone else if their ideas turn out to be duds.

There are several reasons why governments prefer to use consultants over the public service.

Most notably, it provides them with cover. They can claim that a given policy is based on “independent advice”, even though the results are often pre-determined and effectively purchased. It also allows governments to deflect blame to the consultancy firm (read cover their arse) in the event that a policy goes bad.

However, the problems run deeper than merely replacing one set of workers with a more expensive set of workers. It also reflects the broader loss of independence and the politicisation of the public service, whereby governments of both persuasions are now too willing to outsource policy development to consultants or (erroneously named) think tanks.

Add in the seemingly unbridled growth in the number of staffers and advisors in ministers’ offices, and the role of departments in policy formulation and advice has been badly diminished.

Sadly, the days of “frank and fearless advice” have largely disappeared in favour of spin and compromised analysis designed to support a pre-conceived political agenda.


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