Where taxpayer money went during the public service redundancy wave

Regardless of the federal government’s push to decrease contracting out costs, an analysis of the most recent yearly reports exposed departments have actually continued putting millions into external professionals and specialists while at the very same time costs record totals up to shed their own personnel.

Environment Change department secretary Mike Kaiser. Photo by Karleen Minney

The Canberra Times evaluated 2025-26 yearly reports of 15 core departments, the Department of Parliamentary Services, and the 3 biggest companies consisting of the National Disability Insurance Agency (NDIA). The Defence department was omitted as it had actually not launched its report.

The reports revealed a paradox at the heart of the general public service.

Investing in personnel exits consisting of redundancies throughout the 19 entities more than quadrupled, skyrocketing from about $47 million in 2024-25 to $205 million in 2025-26.

Almost every department and company invested more on personnel exit payments in 2025-26 compared to the previous fiscal year.

In spite of this huge shedding of personnel and an election guarantee to conserve $6.4 billion by lowering dependence on external labour and other non-wage costs such as travel, hospitality and home to restore its internal capability, the overall invest in specialists and professionals barely moved. It fell by about $20 million from $2.88 billion to $2.86 billion.

The external costs split

The figures in the reports revealed a plain outsourcing divide. While about half of the entities handled to downsize their external labour expenses, 9 of them increased their consultancy and professional costs.

The Climate Change department stuck out as an example of this paradox. The department invested almost $23.5 million to shed its personnel through voluntary redundancies in the previous fiscal year to line up with “future available funding”more than 5 times the $4.2 million it invested in exits the previous year.

Environment Change department secretary Mike Kaiser. Image by Karleen Minney

All at once, the department put numerous millions into external specialists and specialists, as it’s provider invest climbed up from $220.1 million in 2024-25 to $257.7 million in 2025-26. It had the biggest boost in external labour invest amongst all the entities.

The Home Affairs department contributed a substantial total up to the redundancy expense as it handed over about $75 million on 679 departures, mostly from its Immigration and Border Force personnel.

The biggest outsourcing costs originated from the service shipment front-line companies like the NDIA and Services Australia as their expenses topped $446.3 million and $408.6 million.

The human toll and travel decrease

Thirteen of the 19 entities had an increase in costs on employees’ settlement.

In general, the settlement expenses which covers medical expenditures for physical and mental injuries, rehab, and lost revenues increased from $122.9 million to $126.3 million.

The Home Affairs department had the greatest employees’ settlement costs, leaping from $21.8 million to $24.5 million as the Infrastructure department had the biggest dive in percentage as it increased by 43.9 percent.

While discovering cost savings in external specialist expenses stayed sticky, departments did discover cost savings in other places.

Among the significant casualties of the cost savings drive was travel as costs in the classification was slashed in 16 of the 19 entities. It fell by 15.7 percent in general, from $335.8 million in 2024-25 to about $283 million in 2025-26.

The Foreign Affairs and Home Affairs departments racked up the biggest travel costs, they had actually minimized their year-on-year invest from $81.3 million to $78.3 million and $73.8 million to $54 million respectively.

The Social Services department taped among the biggest decreases, cutting its travel invest by majority from about $7.6 million to $3.2 million.

Alternatively, the Australian Taxation Office (ATO) tape-recorded the biggest dollar and portion boost as it take a trip expense boost by $5.3 million, a 29 percent boost. The Climate Change department included $2.9 million, 12.6 percent boost, to its travel expense compared to 2024-25.

The innovation exception

While the cash has actually moved far from moving bureaucrats around the nation, the expense of running the general public service stayed high.

A blossoming location of expense remained in details and interactions innovation (ICT), as the general public service faced its digital change program, expert system combination and cyber security facilities boosts.

Yearly reports for 16 out of the 19 entities revealed ICT costs increased as departments continued to carry out intricate digital tasks.

Overall costs in the area increased from $2.5 billion in 2024-25 to $2.6 billion in 2025-26 of which, the ATO and Services Australia comprised a big piece.

The Health department included $39.2 to its ICT invest while the Veterans’ Affairs department’s costs in the area increased to 122.4 per cent. They were followed by the NDIA, which grew its tech invest by 38.1 percent.

Procurement information revealed the external costs agreements crackdown had actually mostly left out ICT services as need for technical know-how increased, in spite of departments strengthening its own ranks.

Provider expenses and earnings

Regardless of departments making cuts to particular locations of its provider invest, the total costs on providers throughout the 19 entities increased by about $140 million to reach $10.1 billion in 2025-26.

While 9 departments handled to lower provider costs, those cost savings were mostly balanced out by enormous provider costs in the ATO, Home Affairs department and the NDIA.

In general, costs on salaries and wages leapt by about $660 million, climbing up from $11.8 billion to $12.5 billion.

The Australian Public Service Commission has actually led the general public service broad bargaining procedure, on behalf of the federal government, with the general public sector as it aimed to protect a pay boost and lower compensation spaces throughout department to name a few efforts.