Why Government Departments Hire Private Investigators

Why Government Departments Hire Private Investigators

Government departments in Australia (federal, state, and local) occasionally outsource investigations to private investigators (PIs)—licensed under state/territory laws (e.g., NSW Security Industry Act)—when internal resources are limited, specialized skills are needed, or impartiality is required. This practice has grown since the 1990s-2000s, driven by Commonwealth Fraud Control Guidelines encouraging external contractors for efficiency and expertise. PIs provide discreet, cost-effective support without expanding public sector capacity.

Here are the most common reasons:

• Investigating Welfare or Benefits Fraud Departments like Services Australia (Centrelink) hire PIs for surveillance and fact-finding in suspected overpayments or fraudulent claims, supplementing internal teams.
• Conducting Surveillance Operations Over 20 PI firms perform video surveillance for Commonwealth agencies (post-1999 trials), previously handled only by police/customs. This includes monitoring claimants in fraud or compliance cases.
• Probing Employee Misconduct or Grievances State/local departments outsource impartial investigations into allegations of corruption, bullying, theft, or policy breaches by public servants, ensuring objectivity where internal probes may face conflicts.
• Fraud Detection and Prevention PIs assist in procurement fraud, financial mismanagement, or regulatory breaches, supporting referrals to bodies like ICAC (NSW) or ASIC.
• Workers' Compensation or Injury Claims Verification Government employers (or insurers) use PIs to surveil claimants for exaggeration of injuries, similar to private sector practices.
• Regulatory Compliance and Enforcement Local councils or agencies hire PIs for breaches like illegal dumping, planning violations, or environmental issues when rangers need external support.
• Debt Recovery For unpaid fines, rates, or overpayments, PIs locate evasive debtors or trace assets.
• Background Checks and Vetting In hiring sensitive roles or vetting contractors, PIs perform thorough checks for risks or conflicts.

Outsourcing allows access to specialized skills (e.g., surveillance, digital forensics) while complying with privacy laws. Costs are budgeted (e.g., millions annually for some departments) and justified for impartiality/savings. PIs must operate ethically for admissible evidence. This aligns with broader public sector trends but remains targeted, not routine, to avoid "hollowing out" internal capabilities.