Key Takeaways
- The Australian Taxation Office (ATO) aims to reduce its outsourced work by $500,000 this financial year, a figure deemed "woefully inadequate" by Senator Barbara Pocock.
- The ATO’s target is part of a broader effort by government agencies to curb reliance on external consultants and outsource workers, as directed by the Labor government’s strategic commissioning framework.
- Services Australia, which encompasses Centrelink, cut external workforce expenditure by $733m in 2023-24, but reduced it by only $2.6m the following year.
- The Department of Employment and Workplace Relations (DEWR) refused to set targets to reduce its use of external contractors and consultants, citing that its core work is mostly done in-house.
Introduction to the Issue
The Australian Taxation Office (ATO) has set a target to reduce its outsourced work by $500,000 this financial year, a move that has been met with criticism from the union and Senator Barbara Pocock. The ATO’s annual operating budget is $4.5bn, and the union believes that the target is too small and may even be a typographical error. However, the ATO has confirmed that the figure is correct. This move is part of a broader effort by government agencies to reduce their reliance on external consultants and outsource workers, as directed by the Labor government’s strategic commissioning framework.
Government Agencies’ Approaches
Government agencies have taken different approaches to the directive, with some making significant reductions in external workforce expenditure. Services Australia, which encompasses Centrelink, cut external workforce expenditure by $733m in 2023-24, but reduced it by only $2.6m the following year. The agency has set a target of just over $600,000 for this year. On the other hand, the Department of Employment and Workplace Relations (DEWR) refused to set targets to reduce its use of external contractors and consultants, citing that its core work is mostly done in-house.
Criticisms and Concerns
The union and Senator Pocock have criticized the ATO’s target, saying that it is "woefully inadequate" and that outsourcing public sector work to private firms is wasting taxpayer dollars and undermining the strength and capability of the public service. The tax ombudsman has also noted that staff turnover rates are extreme at outsource centres, leading to a lack of suitably skilled staff taking calls. This has resulted in a deteriorating service and a rising number of complaints. Furthermore, outsource workers on the ATO call lines have reported pay disparity, lack of training, and inferior working conditions compared to public sector employees.
The Illusion of Cost Savings
According to Professor Emmanuel Josserand, government agencies become reliant on outsource models for services such as call centres because they appear to represent a cost saving. However, this is an illusion, as the cost savings come at the expense of stable, well-paid jobs, which are transformed into high-pressure, lower-paid jobs. This not only affects the workers but also the quality of the service provided. Josserand argues that the use of privatised call centres and consultants is a "bit of an illusion" and that it ultimately leads to a lesser quality service and a lesser contribution to the economy.
Conclusion and Future Directions
The ATO’s target to reduce its outsourced work by $500,000 this financial year is a step in the right direction, but it is still a long way from achieving the Labor government’s goal of reducing reliance on external consultants and outsource workers. The union and Senator Pocock have called for a more significant reduction in outsourcing, citing the need to bring skills back in-house and reduce the waste of taxpayer dollars. As the government continues to grapple with the issue of outsourcing, it is essential to consider the long-term effects on the public service and the economy. By prioritizing the use of public sector employees and reducing reliance on external consultants and outsource workers, the government can ensure that taxpayer dollars are used effectively and that the public service provides high-quality services to the community.