# Australian Public Service Spending Paradox Amidst Redundancy Wave Government departments increase outsourcing and technology spending while simultaneously shedding internal staff through redundancies. - **Source:** [Canberra Times](https://www.canberratimes.com.au) - **Published:** 2026-11-06 - **Topic:** [politics](https://brifing.si/c/politics) - **Original article:** - **On Brifing:** https://brifing.si/s/f935eaa9-707f-4f7e-9e82-da0a2b5b05a8 ## Rising Redundancy Costs Australian government departments spent $205 million on staff redundancies during the 2025-26 fiscal year. This figure represents a fourfold increase from the $47 million recorded in 2024-25. Nearly every analyzed entity reported higher exit payouts, reflecting a significant workforce reduction strategy aimed at aligning departments with future available funding constraints. ## Outsourcing Spending Persistence Despite a government pledge to reduce reliance on external labor, total spending on consultants and contractors remained high at $2.86 billion. While some agencies reduced external costs, nine entities actually increased their consultancy spending. This trend highlights a persistent dependency on external expertise even as internal staff numbers were actively reduced. ## Climate Department Paradox The Climate Change department exemplifies the current fiscal contradiction. It spent $23.5 million on voluntary redundancies to cut costs, yet simultaneously increased its external supplier spending from $220.1 million to $257.7 million. This department recorded the largest increase in external labor expenditure among all nineteen entities analyzed in the report. ## Frontline Agency Outsourcing Service delivery agencies continue to drive the highest outsourcing bills in the public sector. The National Disability Insurance Agency and Services Australia recorded combined external spending exceeding $850 million. These figures indicate that despite internal restructuring efforts, core operational functions remain heavily reliant on external contractors to maintain service delivery standards. ## Workplace Morale Impact The ongoing organizational shake-up has negatively impacted public servant well-being. Thirteen of the nineteen entities reported increased spending on workers' compensation, which covers psychological and physical injuries. Total compensation costs rose to $126.3 million, with the Home Affairs department recording the highest bill at $24.5 million for its staff. ## Travel Expenditure Reductions Departments successfully curtailed travel costs, which fell by 15.7 percent to $283 million across sixteen entities. The Social Services department led these efforts by halving its travel budget. However, this trend was not universal, as the Australian Taxation Office reported a 29 percent increase in travel spending during the same period. ## Digital Transformation Costs Information and communications technology spending rose to $2.6 billion as agencies pursued digital transformation and artificial intelligence integration. Sixteen of nineteen entities increased their tech budgets, with the Veterans' Affairs department seeing a 122.4 percent surge. These investments remain largely exempt from the broader crackdown on external supplier contracts. ## Fiscal Policy Implications Total supplier spending across the nineteen entities reached $10.1 billion, rising by $140 million despite targeted savings. While travel and specific labor costs decreased, these were offset by rising technology and consultancy fees. The data suggests that structural shifts in public service delivery are currently driving higher costs rather than savings. ## Sources covering this story - https://www.canberratimes.com.au/story/9385694/how-did-my-aps-department-spend-during-the-redundancy-wave/?src=rss — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._