Treasurer Jim Chalmers has foreshadowed plans by the federal government to beef up the public service as it moves to slash spending on consultants.

Public Service Minister Katy Gallagher has revealed that the government has cut more than $3 billion from its consulting bill and converted $800 million worth of external labour into permanent public service jobs.

“We’ve found about $3 billion in … spending on consultants and contractors that we have removed from agency budgets, we have sent the message that we want to rebuild public sector capability,” she told the ABC’s 7.30 report.

“We’ve converted a number of positions that were external labour into permanent public service jobs and it’s a saving to the budget in the order of $800 million.”

Ms Gallagher said the public service staffing cap had forced behaviour change within the bureaucracy which saw more consultants brought in.

Part of the government’s public sector reform agenda included considering inhouse consulting models, she added.

Treasurer Jim Chalmers said he believed the cuts referred to by Ms Gallager were possible to implement, and that it was important to act.

He said there will always be a role for external expert advice, but not at the cost of becoming  reliant on contractors and consultants.

“What we’re trying to do here, is to recognise there’ll always be a role for external expert advice, but to try and rebalance away from the kind of over reliance that we saw on contractors and consultants under the previous government, and to try and invest instead in the capacity and capability of the public service,” he told the ABC.

“One of the big reasons to try and rebalance away from this over reliance on labour hire and contractors and consultants is so that we can redirect some of that money into rebuilding the public service.

“And one of the reasons we can afford to do that is because frequently, spending on contractors and consultants actually cost more than what it would cost to hire a public servant to do the same kind of job, and so we want to get value for money.”

His comments come after Commonwealth tabled a position on integrity and transparency in public service following the release of the Robodebt report, proposing a common term to apply to all APS enterprise agreements.

The position calls out that employees can access an APS-wide Ethics Advisory Service or a similar service and will be required to attend agency mandated training about integrity.

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