The Coalition government's cap on bureaucracy staff has forced one agency to spend 25 per cent more using contractors instead, prompting it to call for an exemption from the policy.
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Australia's Institute of Aboriginal and Torres Strait Islander Studies has told a major review of the bureaucracy it was unable to get the most out of $40 million in additional funding because of the limit on its ranks of permanent staff.
Instead of hiring 54 more permanent public servants with the funds, the institute had to use contractors at a greater cost, cutting the number of additional staff it could afford by 14.
Institute chief executive Craig Ritchie said the Coalition government-imposed average staffing level cap forced the agency to fill jobs at the core of its work with labour hire, creating high turnover, increased staffing costs and more work for supervisors.
"These inefficiencies impact on the immediate delivery of services as well as creating increased costs for other agencies that contract AIATSIS’ specific services," Mr Ritchie said.
The federal government poured the $40 million into the institute to use over four years for its work preserving, restoring and making digital copies of at-risk Aboriginal and Torres Strait Islander cultural items.
"However, due to the conditions linked with this additional funding, AIATSIS is unable to maximise the value of the investment," Mr Ritchie said.
"An immediate action that would remedy this situation is for agencies with an ASL up to 200 to be made exempt from an ASL cap or allocation, providing it does not exceed 200 and is within existing budget allocations."
The cap had stopped the agency recruiting new Indigenous public servants, he said.
The main public sector union's assistant national secretary, Michael Tull, said the average staffing level cap was a threat to Indigenous cultural and heritage items in the institute's care.
"This is a refreshingly honest submission from AIATSIS, and shows why all APS agencies should be similarly frank and open with the public," he said.
"The government has given to AIATSIS with one hand and then taken away with the other, completely undermining the policy proposal process."
Community and Public Sector Union members in AIATSIS had reported about 30 per cent of the institute's workforce was labour hire, and contractors were involved in almost every part of its operations.
"The 25 per cent premium still doesn’t cover the full cost, since the high turnover of labour hire workers means permanent staff are spending a huge amount of their time training these transient workers who cost AIATSIS more but get paid less themselves," Mr Tull said.
"In this case the ASL cap isn't just illogical, it's shameful. Without it AIATSIS would be able to hire at least 14 more permanent staff, which would provide a huge boost to the agency’s work and for Aboriginal and Torres Strait Islander employment opportunities."
The staffing level cap, enforced by the Coalition since 2015, has received criticism from the head of the Prime Minister's department Martin Parkinson and the Home Affairs Department. Labor has promised to end the cap if it gains power at the next election.
Mr Ritchie also called for greater staff pay offers to make the institute more competitive when recruiting.
Businessman David Thodey is leading the review of the public service and is expected to report his findings next year.
