Australian public-sector outsourcing in the ‘golden era’: Cost savings evidence or anecdote?

This paper provides a report on a multi-method study investigating the watershed period of Australian public sector outsourcing from the mid-1990s through to 2000. Interviews and a large-scale survey conducted with Australian public-sector managers indicate a number of shortfalls in decision-making and decision-evaluation processes from accounting and policy compliance perspectives. The results suggest that the cost savings objective was given a low level of importance, that transaction-cost data were rarely used in decision-making, and that ex-post decision evaluation of the cost outcomes from outsourcing was minimal. These results are also reinterpreted and implications drawn in light of the current day contracting practices of Australian public-sector organisations.