NSW Labor promises to slash $1.6bn from budget by cutting private labour hire

On Monday, opposition leader Chris Minns will announce Labor would cut the use of private external contractors by a quarter if it wins election later this month, vowing to reinvest the extra savings into health and education spending.

Labor said it had commissioned an analysis showing the use of contingent labour had grown by 19% a year since 2016, reaching as high as $1.8bn a year in the current financial year.

It said its own analysis showed labour hire costs would reach $2bn a year by 2025, after the NSW auditor general last week released a report which found $1bn had been spent on private consultants since 2017.

During his campaign launch speech on Sunday, Minns also said he would cut back on the use of consulting firms.

Ahead in the polls less than three weeks out from the 25 March state election, Labor is seeking to paint the Coalition as reckless on spending. When Dominic Perrottet finally ruled out further privatisations after weeks of Labor pressure, the opposition accused the government of racking up billions in gross debt over its ambitious infrastructure pipeline.

The analysis on labour hire costs shows the use of third-party firms is predicted to hit about $2.1bn by 2025, up from about $700m in 2016.

The proposed $1.6bn saving would be used to fund previous Labor commitments to create 10,000 fixed teaching roles.

It comes after Labor announced a suite of measures aimed at public sector workers at its campaign launch on Sunday, including a$76m promise to encourage students into healthcare by offering $12,000 subsidies on university as well as a $93m commitment to hire 1,000 apprentices in government-owned entities like Sydney Water.