Agencies spend $4.9 billion on outsourcing in final budget month
Five federal agencies spent $4.92 billion on outsourcing in June 2026 under use-it-or-lose-it rules.
The five agencies signed off the contracts in the last month of 2025-26, bucking the federal government's stated push to cut spending on contractors and consultants. Defence's capability acquisition and sustainment group led the way with $3.62 billion.
The Tax Office recorded a 172 per cent jump to $375 million compared to June 2025. Agencies typically rush to spend leftover budget in June under so-called use-it-or-lose-it rules.
But three other agencies moved the opposite way: Home Affairs, Social Services and Services Australia all cut their outsourcing spending year-on-year. The government dropped specific financial targets for insourcing in 2024-25 after more than a third of agencies failed to meet them.
- $4.92 billion
- June outsourcing spend
- $3.62 billion
- Defence capability spend
- 172 per cent
- Tax Office year-on-year increase
- 5
- Agencies sampled
Why it mattersThe spending spike shows a gap between government policy and what agencies actually do. Money spent on last-minute contractor deals might be wasted when the goal is to bring work back in-house.
AustraliaAustralian taxpayers are funding larger contractor spending despite the Albanese government's stated goal to reduce private-sector outsourcing and save money.
✓ Claims checked against the source. checked 3 h ago
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