Provided as a submission to the parliamentary inquiry into the NSW Government’s use and management of consulting services, the report identifies consultant shopping, mishandled conflicts of interest and a lack of public service capacity leading to dependence on consultants.

Examples include:

• The NSW Department of Planning and Environment appears to have no capacity to assess the economic merits of major projects, particularly mining projects.
• KPMG offered seemingly contradictory advice to different government agencies regarding the Transport Asset Holding Entity, and by its own admission mishandled the potential conflicts of interest.
• A heritage architect alleges that the NSW Government shopped for a different consultant after he recommended heritage listing for the Powerhouse Museum.
• In both the Dendrobium coal mine extension and Narrabri Gas projects, the Department of Planning and Environment engaged a controversial, industry-aligned economist in the place of their usual consultants. It is difficult not to conclude that the Department shopped for a pro-industry opinion.
• A NSW Government-commissioned report from Deloitte that found carbon capture and storage would cost NSW $16 billion between 2019 and 2050 has never been released despite multiple requests.

Recommendations:

1. Oversight of the NSW Government’s use of consultants be strengthened.
2. Include public sector capacity building in consultancy contracts.
3. Improve data on the NSW Government’s use of consultants.
4. Publish a clear and strict revolving door policy for public servants.
5. The NSW Parliament issue a standing order for papers, for the production of consultant reports and advice.
6. The NSW Parliament consider whether consulting firms could be called before Budget Estimates when they have taken government work.
7. The NSW Government and Parliament review whether a ban on political donations and other contributions from big government contractors, including consulting firms, would be appropriate and, if so, how it might be implemented.

“The NSW Government is a major user of consulting firms, but the evidence is that the NSW people do not always get value for the roughly $200 million per year spent on consultants”, said Bill Browne, Director of the Australia Institute’s Democracy & Accountability Program.

“There are worrying suggestions of consultant shopping, where government uses consultants to get the answers that it wants to hear – to the detriment of the quality of government decision-making.

“A requirement that all consultants’ reports and advice for governments are made public would let people make up their own minds about the quality and integrity of that advice.

“The NSW Government should also look to other jurisdictions to see how they manage and monitor consultants, in particular Western Australia which spends one-sixth as much on consultants as NSW in per capita terms.”