System updates could reduce Home Affairs’ reliance on outside help. 

Home Affairs is looking to reduce the number of contractors it employs, including in specialist technical areas, through IT system modernisation and rebuilding its internal capability. 

The department's precarious financial position was revealed during a recent joint public accounts and audit committee hearing, which cited a leaked report by Proximity Consultants. 

The report suggests $2.1 billion in cumulative efficiency dividends and savings were imposed on the department between 2018-19 and 2024-25, coinciding with Home Affairs being loaded up with additional responsibilities, including in cyber security, “with no additional funding”.

“We're obviously seeing pressures in regards to our data and systems, knowing that we're dealing with aged systems today,” said Home Affairs Chief Operating Officer, Justine Saunders.

The state of the department's cyber security systems is of particular concern. 

The use of aged systems contributed to an average spend of $227.5 million on contractors each year since 2014-15, which officials agreed was mostly ICT-related. Multiple reviews over the years have pointed to “significant efficiencies” if Home Affairs was funded to upgrade its IT systems.

Home Affairs has been directed by the government to reduce its spend on contractors under a broader push to stem what is seen as a “hollowing out” of the Australian public service. 

However, the conversion of contractors will not immediately save money as there is a cost in rebuilding the internal capability to match what the department was receiving from outsourced labour. 

The department will start in core APS functional areas such as project management, with technical roles currently fulfilled by contractors also being targeted for insourcing. 

“Certainly over time that would be the expectation,” Saunders said.