An outsourcing crackdown has been announced for the APS. 

Finance Minister Katy Gallagher, has introduced a new outsourcing tax aimed at reducing the Australian Public Service's (APS) reliance on external contractors and consultants. 

The move is designed to reshape the workforce within federal agencies.

The new measure, known as the ‘additional external labour levy’, is expected to bring in an estimated $375 million over the next few years. 

This tax aligns with a broader strategy that has already led to $624 million in savings this fiscal year by slashing the use of consulting firms and other external entities. 

This approach marks a continuation from the previous year's budget, which sought a $3 billion saving from similar cuts.

Since the last federal election, the government says approximately 8,700 roles previously filled by contractors or labour hire have been transitioned to public servants. 

This includes 2,400 positions that will be officially converted as per the 2024-25 budget. 

However, these roles vary in nature and do not necessarily equate to permanent full-time positions, indicating a nuanced approach to public sector employment.

Defence and other critical agencies have introduced stringent policies, including two-year bans on rehiring public service staff who leave for private consultancies, only to return at a higher cost. 

This measure aims to curb the practice of ‘revolving door’ hires, which has been a costly issue for the APS.

The policy has also placed the government in a strategic position against the opposition. 

The Liberal party, led by Peter Dutton, has faced criticism from Gallagher, who argues that the opposition's plans to cut public service jobs would return the APS to inefficient practices reminiscent of the problematic Robodebt scheme. 

Dutton’s camp has hinted at a reduction of at least 10,000 public servant roles, a move Gallagher equates to a step backward for essential public services.