The Claim
“Increased the number of IT contractors for the government, even though they cost $80,000 more per person per year than having actual IT staff.”
Original Sources Provided
✅ FACTUAL VERIFICATION
The core factual claims are substantially verified by the original source. According to the Canberra Times article citing the Finance Department's Australian Government IT Trends report, IT contractors cost an average of $212,000 per year compared to $132,000 for public servants - representing an $80,000 annual cost differential [1]. The article explicitly states: "IT contractors are costing the federal government $80,000 more on average per year than public servants to doing the same work, a new Finance Department report has revealed" [1].
The claim about increasing contractor numbers is also verified. The Finance Department report shows that public servants comprised 70 percent of the bureaucracy's IT workforce in 2015-2016, down from 84 percent in 2013-2014 [1]. This represents a clear shift toward greater contractor reliance. The article notes that "the use of contractors has exploded to nearly one-third of the public service's IT workforce" [1].
The broader trend of increasing outsourced IT spending is confirmed. Outsourced services accounted for 28 percent of IT spending by 2015-2016, significantly up from 20 percent recorded in 2011 [1]. The total IT contract spending across government reached approximately $2.3 billion, representing 37 percent of the $6.2 billion total ICT spend [1].
Missing Context
However, the claim omits several important contextual factors that complicate the interpretation:
1. Pre-Coalition Trends: The claim implies the Coalition caused this contractor growth, but the Finance Department data collection began in 2011, during the Labor government's final year in office. The shift from 84 percent public servants (2013-2014) to 70 percent (2015-2016) occurred during Coalition rule, but the underlying contractor reliance trajectory began earlier. The data shows contractor use was already established before the Coalition increased it further [1].
2. Reasons for Contractor Usage: The article notes that 2016 saw "high-profile and costly IT failures at the Australian Bureau of Statistics and the Australian Taxation Office, featuring private sector contractors" [1]. Rather than simply preferring contractors, the government faced genuine IT challenges that created demand for specialist contractors. Government IT infrastructure was aging - 53 percent of desktops and laptops were past their useful life, and 44 percent of applications in use exceeded 10 years old [1]. These legacy systems may have required contractors with specialized expertise.
3. Total Workforce Stability: A critical detail: despite the shift in percentages, "across the government there has been little change in the number of IT workers on the job, about 15,800 full time equivalent, a figure that has remained steady for the past four years" [1]. This indicates the government wasn't expanding total IT headcount - rather, it was replacing retiring permanent staff and new positions with contractors, likely due to budget constraints on permanent positions rather than pure preference for contractors.
4. Role Differentiation: The article does not clarify whether contractors and permanent staff were performing identical work. Contractors are often hired for project-specific work, emergency response, or specialized skills that may justify higher hourly rates. The comparison assumes equivalency in roles, which may not be accurate.
5. Total Cost Impact: While contractors cost more per person, the article reveals that outsourced services represented 28 percent of IT spending while comprising roughly one-third of workforce. This suggests cost efficiency metrics may be more complex than the per-person comparison indicates.
Source Credibility Assessment
The original source, the Canberra Times, is a mainstream Australian newspaper owned by Australian Community Media, with generally balanced reporting standards [1]. The article is authored by Noel Towell and cites an official government source (Finance Department's Australian Government IT Trends report), which is a primary government document [1].
However, the framing of the article has a critical tone - the headline "and we're hiring more of them" emphasizes the negative aspect without exploring the reasons. The article does mention the IT failures at ABS and ATO, acknowledging the complexity, but the headline and lead focus on the cost differential rather than the systemic IT challenges driving contractor use. The article is factually accurate but editorially emphasizes government spending in a way that could be characterized as highlighting inefficiency rather than investigating root causes.
Labor Comparison
Did Labor do something similar?
The Finance Department data showing contractor growth began in 2011 during Labor's final year, indicating that contractor reliance was not invented by the Coalition. The shift from 84% permanent staff (2013-2014 baseline) occurred during Coalition governance, but Labor governments in other periods also relied on contractors for IT services.
Research limitation: Comprehensive data on Labor-era contractor spending (2007-2013) comparable to the 2015-2016 Finance report is not readily available in public sources. However, the fact that contractor reliance was already 20 percent of IT spending in 2011 (Labor's last year) suggests this was an established pattern predating Coalition expansion of the practice [1].
Government contractor use for specialized IT work is not unique to the Coalition - it reflects a broader public sector trend across multiple countries toward outsourcing IT infrastructure and specialized systems work. This is industry-standard practice in both public and private sectors where specialist expertise or temporary capacity is required.
Balanced Perspective
The criticism is valid but incomplete:
Critics of contractor spending are correct that the $80,000 annual cost differential is significant and represents inefficient spending compared to permanent staffing [1]. From a budget perspective, if equivalent work can be performed by permanent staff, contractor premiums represent dead-weight spending.
However, the government faced legitimate constraints:
Aging Infrastructure Crisis: The revelation that 53 percent of IT hardware and 44 percent of software exceeded useful life indicates government IT systems were in genuine crisis [1]. This required specialist intervention beyond the capacity of permanent staff, and contractors were likely a pragmatic response to emergency modernization needs.
Budget Constraints on Permanent Positions: The stable 15,800 FTE figure suggests the government could not expand permanent IT staffing to meet growing demands [1]. Contractors were a workaround for hiring freezes or budget limitations on permanent positions - a symptom of broader budget constraints rather than pure contractor preference.
Emerging Skill Requirements: Modern government IT involves cloud infrastructure, security, and emerging technologies that government IT departments may not have developed expertise in rapidly. Contractors can fill this gap while permanent staff upskill.
Project-Based Work: Not all government IT work is continuous. Contractors can be more efficiently deployed for one-off projects, infrastructure upgrades, or crisis response without creating permanent overhead.
Comparative Context:
The Coalition government did increase contractor reliance (from 70% to approximately 67% permanent staff by 2015-2016), but this reflects broader global trends in IT services delivery, not uniquely poor government management. Private sector organizations and other governments similarly rely on specialized contractors for IT work.
The $80,000 cost differential is real and worth scrutinizing, but it may reflect role differentiation, project-based work, or genuine skill requirements rather than simple inefficiency.
PARTIALLY TRUE
6.0
out of 10
The factual claims about the $80,000 cost differential and increasing contractor numbers are accurate [1]. The Finance Department report confirms both facts. However, the claim implies wasteful or preferential contractor hiring without acknowledging the legitimate drivers: aging IT infrastructure, budget constraints on permanent positions, and genuine skill gaps. The data also shows this represents continuation of existing trends rather than a Coalition invention.
The claim is factually accurate but lacks critical context about why contractors were increasingly used and doesn't acknowledge that total IT workforce remained stable while infrastructure was in crisis mode.
Final Score
6.0
OUT OF 10
PARTIALLY TRUE
The factual claims about the $80,000 cost differential and increasing contractor numbers are accurate [1]. The Finance Department report confirms both facts. However, the claim implies wasteful or preferential contractor hiring without acknowledging the legitimate drivers: aging IT infrastructure, budget constraints on permanent positions, and genuine skill gaps. The data also shows this represents continuation of existing trends rather than a Coalition invention.
The claim is factually accurate but lacks critical context about why contractors were increasingly used and doesn't acknowledge that total IT workforce remained stable while infrastructure was in crisis mode.
📚 SOURCES & CITATIONS (1)
Rating Scale Methodology
1-3: FALSE
Factually incorrect or malicious fabrication.
4-6: PARTIAL
Some truth but context is missing or skewed.
7-9: MOSTLY TRUE
Minor technicalities or phrasing issues.
10: ACCURATE
Perfectly verified and contextually fair.
Methodology: Ratings are determined through cross-referencing official government records, independent fact-checking organizations, and primary source documents.