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09 January 2015

Public service hiring freeze delivers $100 million cash bonanza to private recruiters

Private recruiting firms reaped a bonanza of more than $100 million in Commonwealth contracts in 2014, cashing in on the Abbott government's public service hiring freeze.

Spending by government departments on the big five recruiters soared by nearly 50 per cent last year to $97 million as public service bosses looked to temps and contractors to plug the growing gaps in their workforces caused by years of redundancies and the hiring freeze.

Spending by the Prime Minister's own department on workers supplied by the big five soared by more than 400 per cent, from $607,000 in 2013 to at least $2.6 million in 2014.

The federal opposition says the figures show the government's public sector policies are a false economy, allowing bureaucrats to leave with large redundancy payouts only to return, sometimes within weeks, as contractors.

But Public Service Minister Eric Abetz defended the spending, saying $97 million was not much compared with the Australian Public Service's last annual wage bill of nearly $19 billion.

An analysis of published federal departmental contracts with big five personnel outfits Drake, Hays, Hudson, Face2Face and Randstad shows $97 million of taxpayers' money was spent with the companies in 2014, up from $67 million the previous year.

The figures do not show the full extent of Commonwealth spending on commercially recruited temps and contractors, which are exempt from the hiring freeze imposed in October 2013, because the many smaller players supplying workers to the government have not been included.

Labor's shadow assistant treasurer Andrew Leigh said the spending made a mockery of Coalition rhetoric about small government.

"The Abbott government's cuts to public sector jobs are clearly a false economy," the Labor frontbencher said.

"The government talks a lot about making savings through smaller government.

"In reality, it seems public servants are walking out the door one day as permanent staff and walking back in the next as temporary contractors."

Dr Leigh said the temporary workers hired under the contracts missed out on job security, long-service leave, holidays and sick leave in the process.

"This is the Liberal Party's industrial relations dream: to make every job a precarious one and gut workplace entitlements in the process," he said.

"The government should drop the facade that APS job cuts are about budgetary savings.

"This is simply about advancing the Liberal Party's ideological industrial relations agenda."

But Senator Abetz said departmental heads were entitled to spend some of their budgets on temps as part of the government's "orderly" efforts to downsize the public service, and blamed Labor's "unfunded" redundancies for any shortfalls in the workplace.

"Despite Labor's secret, unfunded 14,500 public service job cuts, the Coalition government is managing an orderly reduction in the size of the APS to a more sustainable level," Senator Abetz said.

"Individual agency heads are responsible for labour hire agreements, if they choose to use them, having regard to their agency's budgetary situation and government policy objectives.

"To put the figures quoted in context, $97 million is equivalent to only half a per cent of the total APS 2013-14 wages bill of $18.8 billion.

"It is unsurprising that as part of the orderly reduction in the size of the APS, agency heads are using temporary recruitments in order to maintain flexibility and maximise efficiency."

Hey big spender: the top five departments for spending on temps and contractors:

  • Social Services – $19,311,229
  • Defence – $17,356,434
  • Health – $9,290,392
  • DFAT – $6,788,027
  • Veterans Affairs – $5,917,443