The government's multibillion dollar spend on contractors will come under the scrutiny of a new parliamentary probe after the national auditor found massive growth in work going to consultancy firms since 2012-13.
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Following an auditor-general's report that estimated the government poured $47 billion into contracts last year, a parliamentary committee will look at the volume and value of the spend and the way agencies conducted procurement.
Chair of the public accounts committee and Liberal senator Dean Smith said government contracting was an area of spending that deserved close and constant scrutiny.
"Effective procurement contract behaviour is vital and transparency in contract reporting is critical so that the government can assure itself and the Australian public that entities are achieving their objectives in an efficient and cost-effective manner," Senator Smith said.
The main public sector union said the inquiry was a long overdue examination of the cost, effectiveness and lack of transparency involved "when private interests are invited in to profit from public services."
Community and Public Sector Union national secretary Nadine Flood said multinational companies like the big four consultancy firms, KPMG, Ernst and Young, PricewaterhouseCoopers and Deloitte, had reaped tens of millions of dollars through government contracts.
"The Turnbull government is looking for even more opportunities to line the pockets of private companies through these kinds of arrangements," she said.
Ms Flood said the growing use of outsourcing under the Coalition raised multiple problems.
"Firstly, using profit making enterprises generally means higher costs and lower quality services," she said.
"Secondly, the hard-working people who actually provide the services end up being paid less without decent working conditions."
Contracts for private companies also lacked the transparency involved when government agencies did the work instead, Ms Flood said.
The Australian National Audit Office report released earlier this month showed federal government consultancy contracts established because of "need for specialised or professional skills" grew from more than $200 million in 2012-13 to more than $500 million last financial year.
Job cuts since the 2013 federal election have seen the public sector workforce at the lowest level in nearly a decade and almost $700 million being spent on consultancy contracts in 2016-17.
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The figures include contracts which required independent research or assessment to be completed, and skills considered "currently unavailable" within the contract's home department or agency.
The largest advisory and consultation categories included management advisory services, IT consultation, research programs, strategic planning, business intelligence consulting and economic and financial evaluation of projects.
In August it was revealed federal government spending with Australia's biggest consultancy firms more than doubled since Tony Abbott's election win, costing taxpayers nearly $1 billion since 2013, despite pledges to drive down public service outsourcing.
Figures provided to a Senate committee showed contracts with the big four consulting firms more than doubled in value from $196.4 million in 2013-14 to $420.3 million in 2015-16.
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