Spending on security at Parliament House in Canberra may have to be reduced along with cuts to other services in the building, a Senate estimates hearing was told on Monday.
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One option being looked at is replacing the Australian Federal Police, who defend the perimeter, including against terrorist attack.
Department of Parliamentary Services secretary Carol Mills said negotiations were under way with the AFP, whose contract expired last year.
Asked if she had a contingency plan to do away with the AFP presence, Ms Mills said she was looking at options to get value for money, including discussions with Defence which conducted a similar appraisal of security.
Ms Mills said she placed the highest priority on security.
"Can I please reassure the committee that at no point does the department want to jeopardise the security of this building and we are trying to do this within the budget … we have to get best value for our buck and that is the reality of the life we're living at the moment,'' she said.
About a quarter of the department's $101 million-a-year budget is spent on guards and AFP officers providing security for Parliament House.
Budget cuts mean the department is expected to record an operating deficit of more than $6 million this year.
Ms Mills said despite the consumer price index rising by 27 per cent since 2003-04, which had affected the cost of the department's commercial contracts, its budget had fallen from $105.5 million to below $100 million from next financial year.
She said she had been working with the presiding officers for several months over ways to save money.
"On the basis of forward estimates, much more difficult decisions will have to be made almost immediately,'' Ms Mills said.
''These will affect all areas of our services from the parliamentary library to building maintenance and security.
''These service reductions will impact directly on the Parliament, the work of parliamentarians and our ability to adequately maintain this internationally important and iconic building.''
Ms Mills said work was under way on new security screening arrangements that could cut costs, including allowing a limited number of people to enter without baggage checks based on a ''trust assumption''.
The move could reduce costs by about $400,000 a year but the proposed changes to screening which were to begin this month were delayed after calls for more consultation.
Liberal senator Bill Heffernan said he was concerned over any lowering of security or changes in screening.
''This is actually an invitation to mischief,'' he said.
Senator Heffernan said he strongly disagreed with downgrading security for a ''piddling $400,000 saving''.
''It would be over my dead body,'' Senator Heffernan said.
''If we can't afford to secure the building we shouldn't be here.''
