General discussion, page-7

Yesterday I mentioned why I thought the price was down. I thought I should add an explanation of why I bought in at this price.

Canberra often introduces consultant freezes, but the public service machine is built on the public servants thinking things and the consultants doing those things.

In the past, the freezes have only had a short-term impact on consulting firms as it soon becomes painfully obvious that nothing is happening and the consultants are back in.

This one was a double-barrelled incident; PWC was found out doing what everyone knew they had been doing for years and years, but finally, someone paid attention. This led to a wider review of consultant spending. Queue outrage at the waste of tax payer money, political points scored, turn off the money tap that fills the consultant pig troughs that they all have their face down in.

This lasts 6 months. Federal departments are not able to hire the talent that big 4 can. They try and do it with the people they have. Putting it mildly, they have never been able to recruit from the top of the talent tree, so projects run over or fail.

We are 4 months into the ripples of the consultant freeze, I expect this one will last longer but by October the pig trough will be full to the brim.

Lots of guesswork here but I keep an eye on the Austender website which publishes details of any public sector spending over 100k and I can already see consulting engagements picking up again. Interestingly, not for the big 4, I think the freeze is going to impact them more. I can see the next tier down from them tho and that is where ATA sits. DYOR.