The Commonwealth department in charge of Centrelink has spent more than $800 million in the past two years on labour hire contractors to outsource thousands of public service jobs in call centres and compliance.
Spending on contracted labour in the Department of Human Services has soared since the Coalition government began a major outsourcing push in 2016, amid union claims at least 2750 public servants have been cut adrift and replaced with labour hire contractors.
The vast majority of the jobs that have been privatised have come via new Centrelink call centre operators run by the corporate sector and the outsourcing of roles in the agency's compliance division.
The privatisation push raised the ire of the Community and Public Sector Union, which has warned it would lead to poorer outcomes for the general public using the system and poorer pay and working conditions for contractors.
It comes amid successive years of budget cuts at Centrelink, the ongoing so-called 'robo-debt' saga with its automated debt recovery system and concerns that despite call waiting times improving in recent months, clients are not actually getting issues resolved any quicker.
But the government maintains it has not affected the quality of the services provided to Centrelink clients, and that all staff engaged through labour hire firms receive the same training as those employed directly.
Since the start of 2017-18, the department has entered into six major labor hire contracts worth a total of $881.5 million, a figure dwarfing previous estimates of the cost of the changes at about $200 million.
The data shows the department paid Adecco Australia $229 million and Chandler Macleod $226 million in 2017-18 as part of a move to privatise many of the agency's compliance roles.
Then in 2018-19, the agency entered into a further $425 million worth of contracts to privatise call centres, awarding Stellar Asia Pacific a $135 million contract and Concentrix Services winning a $132 million contract.
A further two contracts were also awarded to Datacom Connect, worth $120 million and Serco, worth $36 million in 2018-19, also to operate call centres that were previously mainly staffed by public servants.
The department also awarded Chandler Macleod and Hays each a two-year $25 million labour hire contract for a range of services across various areas of the department.
It is understood outsourcing in the department has also begun to expand into the Medicare system in recent months, though the full cost and scale of those changes is unclear.
Then-Human Services Michael Keenan announced a further 800 DHS jobs would go to private operators on October 30 last year, the day before some $389 million worth of two-year call centre contracts came into effect.
While Mr Keenan relied on a KPMG report to the government as backing the latest round of outsourcing, he has refused to release it, citing Cabinet confidentiality, despite releasing some sections to some media outlets.
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DHS spokesman Hank Jongen said the agency handled more than $173 billion in payments and more than 3.3 million social security and welfare claims last fiscal year.
"Operating on such a significant scale requires a blended workforce model, including the use of contractors and outsourced providers, to give us the flexibility needed to respond to changes in service demand and budget priorities," he said.
Mr Jongen said the department's use of labour hire was "nothing new" and the department had engaged contractors for "specialist services and to support day-to-day operations to help fill our short term needs.
The department was unable to explain by deadline what specialist services were involved in call centre operations, or why some of the contracts entered into are for up to two and half years.
"These workers complement our staff. They are not a replacement," Mr Jongen said.
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