Key insights:

1. Contracting squeeze – Federal departments are reducing labour hire and tightening budgets,making it harder to fund new projects and adding pressure on suppliers and candidates.

2. Supplier competition intensifies – The Digital Marketplace now includes over 1,000 approved labour hire suppliers, significantly increasing competition in the Canberra market.

3. AI capability uplift – Agencies are running pilots and proof-of-concepts in generative AI and automation, with demand rising for candidates skilled in AI, data, and cyber security.

These regional insights are updated quarterly, if you need help navigating the hiring landscape over the next three months please reach out to our team.

Post-election,the Labor government has reaffirmed its commitment to innovation and cost savings, though the scale of project commitments from the election and budget may challenge how achievable this really is. Health, Aged Care, and Disability sectors continue to be major growth areas, supported by multi-billion-dollar investments in initiatives such as the NDIS capability uplift, Aged Care reform, and Medicare enhancements. The current state of the Coalition may embolden the government to advance more assertively with its policy and reform agenda, particularly across social and public infrastructure sectors.

BuyICT and People Panel remain the main approved procurement models for engaging contingent and labour hire workers across government. Adoption of these models is now consistent across most agencies, and demand for compliant sourcing strategies is expected to grow. Providers and candidates should ensure full familiarity with these frameworks and align with compliance requirements.

Contracting has become more challenging as federal departments continue to focus on reducing labour hire, with tighter budgets making funding for new projects harder to secure. This has placed additional pressure on both suppliers and candidates, as agencies become more selective with resourcing decisions.

Stability and security are now top of mind for contractors. Following a year of budget constraints and uncertainty, there is a clear preference for long-term engagements, fully funded projects, and strong visibility of the project pipeline. Hybrid and flexible work remain the default expectation, but there is growing openness to full-time onsite roles, especially where the work is meaningful, team culture is strong, and compensation is appropriate.

The Digital Marketplace has now grown to over 1,000 approved labour hire suppliers,significantly increasing competition in the Canberra market.

Many departments are facing dual pressures: reducing reliance on external labour while still needing to deliver ambitious digital and infrastructure programs,often without sufficient internal capability. As a result, clients are increasingly seeking adaptable, pragmatic, and collaborative candidates. Those who are flexible on rates in exchange for long-term, high-impact work are particularly valued.

The government remains committed to digital transformation and service delivery reform, though program pipelines are increasingly scrutinised for efficiency and cost justification. AI is rapidly emerging as a priority area, with many agencies running AI pilots, proof-of-concepts, and capability uplift initiatives to understand how generative AI and automation can improve service delivery and back-office efficiency. Candidates with skills in AI, data, and cyber security are particularly well placed as agencies begin to scale these capabilities.

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