Author Christopher Stone says shifting responsibility to the private sector is not necessarily a cost-effective strategy when the public sector is better placed to provide essential services.

''Cuts to the public sector can end up costing far more than they save, and leaving some jobs to the private sector will result in them being done badly or not at all,'' he says in False Economies - Doing Less with Less.

''While some politicians talk about doing 'more with less' this can in reality mean doing less with less.''

The report is published by the Centre for Policy Development, to build on its report from earlier this year which warned about further cuts to the public service in the federal budget.

In the latest report Mr Stone says those who subscribe to a ''neo-liberal perspective'' can often forget there are some tasks that governments are better suited to than the private sector.

''This can lead to attempts to 'shrink' government even in the face of both public opinion and evidence,'' he says.

''A blind faith in the market can result in decisions to withdraw government from the jobs it should be doing.

''This can be through selling government assets, outsourcing services previously provided by the public sector, or simply withdrawing government from the area in the expectation that the private sector will fill the gap.

''Privatisations, government outsourcing, or simple cuts, are pursued on the mistaken assumption that the private sector is always more efficient than the public sector, and therefore the costs to government, or the economy as a whole, will be lower.

''This can be a false economy, with the private sector doing so much less in critical areas, that any potential savings are overwhelmed by the costs of doing too little.''

The report gives case studies to argue the value provided by public services is greater than their costs.

''In presenting these examples this report is obviously not putting an argument that all public sector cuts will cost more than they save, or that all public services must be delivered directly by the public sector,'' the report says.

''The intention is simply to make the point that cuts or non-government delivery can be counterproductive.

''Sometimes public sector cuts will cost more than they save, and some public services should be delivered by the public sector.

''This means that proposals to cut the public sector, or to have the private sector deliver public services, should be scrutinised carefully to ensure that inefficiencies will not be created.''

Mr Stone says the cases provide evidence that reducing government can be wasteful and inefficient.

''They are a warning that when cuts, privatisation, or outsourcing are considered, there needs to be thorough and sophisticated analysis of the costs and benefits of such actions,'' he says.

As an example, he cites Queensland spending $120 million maintaining public works skill capacity in 2011, much higher than that of Victoria.

''Queensland may have saved nearly three times what it spent, $350 million, by using that capacity to keep public works costs low,'' he says.

For an example where the public sector does the best job, he cites the federal government's stimulus package against the global financial crisis, to avoid Australia's economic growth being negative for three consecutive quarters.

''The effect of the stimulus package was to avoid the waste of our economy being $7 billion smaller,'' he says.

The report was funded by the Community and Public Sector Union, the Becher Foundation and Slater & Gordon.