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South Australian Public Sector Contract Bill Doubles to $445M
Source: The Australian
Source Date: Monday, June 04, 2012
Focus: Electronic and Mobile Government, Internet Governance
Country: Australia
Created: Jun 05, 2012

THE South Australian Labor government has doubled to $445 million its spending on consultants and contractors in the past financial year as it grapples with spiralling public sector costs.

Treasurer Jack Snelling's second budget on Thursday revealed the state government spent about $4 billion on non-staff operating expenses this year, a jump of about $1bn on five years ago.

This includes spending on outsourced consultancies and contractors, which last year made up $445m of the total, including a reclassified transport contract worth $245m. In 2010, the total figure reported in the budget was just $221m.

An analysis of the budget papers reveals the state government spent more than $16m on consultancies in the past financial year, about $3m above budget and a 25 per cent increase on the previous year.

Opposition Treasury spokesman Iain Evans said the spending was a "departmental trick" to outsource work that should be done within agencies.
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"It is hard to believe, with 85,000 public servants, there is not someone in the public service who can make some of these decisions and provide some of this research," he said.

"The public service should have the skills to provide the advice required to government on most issues."

The surge in operating costs comes as the state forecasts record operating deficits of almost $1bn for each of the next two years, and is under fire for failing to curb the growth in public sector numbers.

The South Australian public service has swelled from about 75,000 five years ago to 82,214 this month, despite repeated government commitments to reduce its numbers.

This year's budget included $60.4m to cut 1000 public service jobs over the next three years, as it continues to work towards meeting previous cuts of 4100.

Mr Snelling has defended the government's management of the public services, saying he is committed to creating a "leaner, more efficient" operation.

A spokesman for Mr Snelling said that the use of consultants was a matter for individual departments. "Departments may need to use consultancies for a variety of reasons," he said.

"What we have just announced on Thursday is that we are expecting departments to be more than $255m more efficient over the next four years to create a leaner government."

The budget papers show the agencies that were most dependent on outsourced work were the Department of Transport, with contracts totalling $272m, the Department of Water, which spent $33m, and the Department of Education, which spent $27m.

The Department of Manufacturing, Innovation, Trade, Resources and Energy spent the most on external consultants, followed by Health and the Department of Premier and Cabinet.
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