Federal spending on IT outsourcing has surged to $808 million, tripling over three years, despite policies aimed at reducing contractor reliance.A Canberra Times analysis of AusTender data reveals IT temporary personnel costs rose from $289 million in 2022-23 to $808 million in 2025-26, with contract volumes increasing 1.5 times.

The government's Strategic Commissioning Framework requires agencies to identify core functions for in-house operations, but digital skills shortages persist.The Digital Traineeship Program, launched in 2022 to address workforce gaps, was scrapped due to low sign-ups.Agencies prioritize mid-career hires over entry-level training, exacerbating shortages in cyber security and AI roles.The Digital Transformation Agency projects a need for 8000 additional digital workers by 2030, amid retirements and demographic shifts.While efforts to address the shortfall continue, the reliance on external contractors remains a challenge for public service modernization.