Private sector ready to pounce after public service cuts

The balance of Canberra's economy is tipped to swing towards the private sector as consultants position themselves to pounce on government opportunities from a tough budget. 

Canberra Business Council chief executive Chris Faulks expected public cuts would lead to the private sector providing 60 per cent of the city's jobs, with opportunities for organised enterprises of all sizes. 

"This time around there’s going to be even more opportunities for big players, potentially whole programs will need to be done, whereas in past [from 1996] it was just consulting back in,"  Ms Faulks said. 

She pointed to strong growth in the past six months for registrations for the council's educational BusinessPoint program, with exiting public servants now making up 28 per cent of attendees.

An ACT government report published before last year's election said the private sector employed 120,000 people from the labour force of 220,000, or 54.5 per cent.  


Canberra Consulting chief executive Jason Pepper said there had been an immediate response to the budget from his exclusively federal government clientele.

“We’ve already spoken to lots of clients, a lot of clients are engaging with doing more with less,” Mr Pepper said.  

The company, which has about 100 employees, noticed   a rise in requests for quotations from May 14 – the day after the budget – and Mr Pepper anticipated a profitable period.

“I’d see the work to merge the back-office functions – the Commission of Audit work – will be about two years’ worth,” he said.  

“Backroom” functions will be rationalised throughout the public service, including at seven of the capital’s cultural institutions.

PwC Canberra managing partner Jeremy Thorpe said it was a challenging time for many in the city, but opportunities existed for those who could be innovative and agile, regardless of business size.

“If we’re talking about innovation in customer service delivery, that’s where there’s opportunity,” Mr Thorpe said. 

The pie for professional services to government is an increasingly large one – federal spending on outsourced managers and business advisors as well as administrative and human resource services grew by more than $6 billion, or 70 per cent, in the past year – creating plenty of work for the established corporate players.

But Mr Pepper agreed with Mr Thorpe that stories from the early Howard government years of public servants being fired one week and returning to do the same job on a higher, private-contract wage the next are less likely to be repeated.

“They’re not targeting front-line services – which would be where you leave as a public servant and come back as a private contractor,” Mr Pepper said. 

The Coalition has announced the cutting of 16,500 public servants' jobs in three years, about half the national 30,000 head count reduction that occurred in the equivalent Howard years. But with the nation’s next surplus not forecast until what would be Prime Minister Tony Abbott’s sixth year in office, the government would appear to have more motivation than did Mr Howard to keep spending – and perhaps Canberra-based consulting costs – to a minimum.