The Impact of Outsourcing and Full-Cost pricing initiatives on Local governments

The Impact of Outsourcing and Full-Cost pricing initiatives on Local governments

Outsourcing has become a regular practice in the Australian public sector, including in local governments, which have increasingly used outsourcing mechanisms to reduce costs and deliver services (Blank & Niaounakis 2021). The impact of outsourcing on Australian local governments has become a revived topic of interest especially in light of the recent PwC - Australian Tax Office advice scandal that came to light in early 2023. This article looks at a body of literature that exists on National Competition Policy in Australia, which has developed over the last thirty years, with a focus on full cost pricing and outsourcing; and has narrowed its scope down to the Queensland local government paradigm. This article is the first part of a Doctoral-level research project undertaken by an experienced, regionally Queensland-based local government CEO and the Rural Economies Centre of Excellence – a research partnership looking at rural, regional and remote development mainly in Queensland. Our aim is to address the question “What impact has outsourcing and full-cost pricing initiatives of local government services had on local governments throughout Queensland (and Australia)?, explore the theory behind outsourcing and full cost pricing and start to prosecute some implications for future reform that could aid the efficacy of local government and especially those in regions. The authors contend that when it comes to regional versus urban-based local government, full cost pricing is one key policy area that potentially disadvantages the regions and their rate payers.

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