Photo: Unsplash / Dimitri Karastelev
Many public sector agencies have lifted their spending on contractors and consultants by about 60 percent in real terms, on average, since pre-Covid-19 times.
New figures show that since 2019, some agencies' spending on private contractors has risen over 150 percent.
In total, the bill has risen to $1.268 billion year-on-year to mid-2023.
This is virtually flat, allowing for inflation, compared to the heady 30 percent leap the previous year, from $940m in 2021.
The Public Service Commission focused narrowly in its media release on a small drop in operating expenses, ignoring the 10 percent rise in capital spending on contractors and consultants.
The total figure is the one politicians have focused on, such as when National pledged early this year to cut $400m to help balance its books if it won the election - though it appeared to include in the swing of that axe the full gamut of public agencies, which easily number 150-plus.
The top 10 spenders are headed by the Ministry of Education, which has entrenched its place as the biggest spender, where formerly it was the IRD which is overhauling its IT systems.
The Ministry for Social Development (MSD) and Ministry for the Environment take the top spots for the largest rise in spending since 2019, not far off doubling it - though MSD is off a much higher base to hit $130m this year.
At the other end, the Ministry of Health sliced more than $100m off its contractor bill - and Inland Revenue did the most to cut back.
Health has been helped by shedding a pile of functions and jobs to Te Whatu Ora, which, if it were on the core list - and it is not - would swing spending way higher.
On just the big four consultancies, Te Whatu Ora shelled out $69m in the year to July, most of it to Deloitte ($43m).
The big contractor and consultant spending was in the sights of both political camps pre-election: Labour pledged to get it down below 11 percent of the total core public sector wage bill.
It is at 13 percent now, a bit lower than last year.
The top core public sector spenders on contractors and consultants are - not allowing for 19 percent inflation since 2019:
- 1. Education - $278m this year, which is 79 percent higher than in pre-pandemic 2019, and compares to $230m last year
- 2. MSD - $133m, +190 percent, $46m
- 3. Internal Affairs - $122m, up 115 percent, $57m
- 4. MBIE - $104m, steady, $99m
- 5. MPI - $63m, up 14 percent, $55m
Several agencies spent in the $40+ million range - IRD, Health, Justice, Customs (up 158 percent since 2019); and in tenth spot, Environment on $37m, though that is 200 percent more than pre-Covid 2019.
