Public service cuts 205 million in staff but keeps spending 2.86 billion on consultants
Australian federal departments spent a record amount on staff exits while keeping consultant spending nearly flat at about $2.86 billion.
The Australian Public Service had its biggest redundancy wave on record. Staff exit costs reached $205 million in 2025-26.
The amount was more than four times the about $47 million spent before. Australian federal departments spent about $20 million less on consultants and contractors than before.
Spending fell from $2.88 billion to about $2.86 billion. But spending remained high despite a government promise to save $6.4 billion by using fewer outside workers.
Nine of the 19 groups studied actually increased contractor spending while cutting staff. The Climate Change department was the starkest example.
It spent nearly $23.5 million on redundancies. At the same time, it raised contractor spending from $220.1 million to $257.7 million.
Workers' compensation costs also rose. They went from about $122.9 million to $126.3 million.
- $205 million
- Staff exit spending 2025-26
- $2.86 billion
- Consultant spending 2025-26
- $6.4 billion
- Promised government savings
- 19 entities
- Departments analyzed
Why it mattersThe government is cutting its workforce but not cutting its reliance on outside experts. This undermines the stated goal of rebuilding in-house capacity and reaching promised budget savings.
AustraliaAustralians who pay tax are funding record redundancy payouts while the external spending that was supposed to drop remains largely unchanged, delaying promised savings.
✓ Claims checked against the source. checked 59 min ago
