Home Affairs is hoping that IT system modernisation and a rebuild of internal capability will allow it to reduce contractor numbers “over time”, including in “specialist technical areas”.
A joint public accounts and audit committee hearing on Friday revealed details of the department’s precarious financial position, citing a leaked February 2022 report by Proximity Consultants.
Department officials agreed they were dealing with “structural underfunding”.
The report states that $2.1 billion in “cumulative efficiency dividends and savings” were imposed between 2018-19 and 2024-25, coinciding with Home Affairs being loaded up with additional responsibilities, including in cyber security, “with no additional funding”.
“Over time we’ve had to manage historically through a number of trade-offs around operational delivery, systems, processes and people,” chief operating officer Justine Saunders said.
Specifically on the systems front, Saunders said: “We’re obviously seeing pressures in regards to our data and systems, knowing that we’re dealing with aged systems today.”
It was reported Friday that the state of the department’s cyber security systems was of particular concern.
Aged systems had contributed to an average spend of $227.5 million on contractors each year since 2014-15, which officials agreed was mostly ICT-related.
Committee chair Julian Hill said multiple reviews over the years had pointed to “significant efficiencies” if Home Affairs was funded to upgrade its IT systems, which officials agreed with.
“Most contractors engaged in the ICT space need specialist skills to maintain the complex and ageing ICT systems across both the department and the ABF [Australian Border Force],” the leaked report stated.
“This is another example of a potential efficiency gain and the need for ongoing and significant investment to reduce the risk of system failure”.
Saunders said that Home Affairs had been directed by the government to reduce its spend on contractors under a broader push to stem what is seen as a “hollowing out” of the Australian public service (APS).
“We’ve got some clear direction from [the] government to address the hollowing out of the APS and transfer those contractors where we can to [staff], so certainly we have a strategy to be able to deliver that over the coming months,” Saunders said.
The conversion of contractors would not immediately save money as there was a cost in rebuilding the internal capability to match what the department was receiving from outsourced labour.
“There’ll be an initial investment required to bring the APS capability to the level to be able to replace a contractor, and clearly we’re not starting at the high end of specialist technical skills,” first assistant secretary (CFO) Stephanie Cargill said.
“We would start in the core APS functional areas such as project management, for example.”
Saunders added, however, that more technical roles currently fulfilled by contractors would also be targeted for insourcing.
“Certainly over time that would be the expectation,” she said.
