Federal government cuts spending on big four consultants by half

Contracts awarded to PwC, Deloitte, Ernst & Young and KPMG from July 1, 2023 to March 31, 2024 nearly halved in value from the same period in the 2021-22 financial year, according to figures from the Finance Minister.

The value of the contracts awarded to the big four fell to $634.9 million from more than one billion dollars.

The total number of contracts also fell from 1432 to 768.

Government spending on all consultancies, not just the big four, dropped overall.

According to data from AusTender, the total value of government contracts to consultancy firms dropped from 1 per cent in the 2021-22 financial year of all federal public spending to 0.67 per cent in the 2023-24 financial year.

Finance Minister Katy Gallagher said the government was focusing on improving the capacity of the public sector.

"Since coming to government, we've significantly reduced the number of contracts going to consultants, while rebuilding the public service's capacity to the standard Australians expect," she said.

The big four still sit near the top of the pack when it comes to the largest contracts awarded during the first three quarters of the 2023-24 financial year.

Ernst & Young picked up the largest contract on offer, with an $18 million contract from the Department of Defence.

Next up was engineering consultancy Jacobs Group, which was given a $14.7 million contract for Environmental Investigation by the Infrastructure Department.

Rounding out the top five were Deloitte, another $5 million win for Ernst & Young and engineering specialist Aurecon.

The largest single contract that went to an Australian-owned firm was a $4.7 million contract to Nous Group from the Department of Health and Aged Care.

The former public-sector arm of disgraced consultancy PwC, Scyne - which was purchased by private equity investor Allego Funds for $1 in 2023 - secured three contracts worth just over $5 million.

PwC landed a single government contract of $405,990 that was published during the period, however the contract began prior to the government's ban on April 30, last year.