The Coalition should cap contractor numbers, dump a $65 billion corporate tax cut and invest money in its agencies to rebuild services, the main public sector union has said ahead of the federal budget.
In a submission to the government lashing its growing use of contractors, and rejecting its controversial push to relocate agencies to the bush, the Community and Public Sector Union also called for more Tax Office funding to increase revenue made stopping corporate tax avoidance.
The CSPU attacked the Coalition's multibillion dollar contractor spend saying caps on staff numbers had created a "perverse incentive" to outsource work and increase costs.
Agencies were using labour hire and contractors to get around a staffing cap imposed by the Coalition, while outsourcing was "hollowing out" the Australian Taxation Office, and the Human Services department overseeing Centrelink, it said.
The union pushed for a cap on contractors, and said work given to consultants and outsourced elsewhere should return to agencies to rebuild the public sector's capacity and keep personal data secure.
"Ruling out further cuts will undo the damage that has already occurred," it said.
The government should identify savings it could make by cutting consultants and contractors, and reinvest them in the public sector.
Even where agencies had the funding to hire additional staff, the Coalition's staffing cap forced them to engage casuals and contractors, and use labour hire, the CPSU said.
"The arbitrary cap is creating a perverse incentive that it not guided by the best use of resources and those employees are paid significantly less with far worse conditions than the equivalent APS employees.
"The cap is an ideologically-driven commitment that is damaging to the capacity of the public service and costing the community."
The ATO faced limits to its work stopping corporate tax avoidance with its resources, and previous cuts to its staff were illogical given the need for more revenue.
"This disconnect between public expectations that tax avoidance should be addressed and what the ATO can actually do must be addressed by the government," the CPSU said.
"It should commit to an increase in base funding and providing more staffing for the ATO if it is serious about tackling corporate tax avoidance and increasing revenue for our public services."
The government receives hundreds of submissions to the budget process - with business groups, unions, community organisations and non-profits laying out their wish lists for the year ahead. Some proposals are adopted, while others are ignored.
A spokeswoman for the new minister assisting for the public service, Kelly O'Dwyer, said the government would consider proposals made ahead of the budget, but was committed to reducing the overall company tax rate to 25 per cent for all businesses.
The Coalition had reinforced tax integrity rules with new anti-avoidance measures targeting multinationals, including a new 40 per cent penalty rate of tax to stop companies diverting profits offshore when made in Australia.
"The government has made clear that every company, indeed every taxpayer, must pay the right amount of tax, including big business," the spokeswoman said.
The CPSU also called the government to increase regional public sector employment by reversing job cuts and increasing the APS' footprint, while rejecting relocating agencies under the Coalition's decentralisation push.
It said the government should buoy stagnant wage growth with departmental wage rises, and use the APS to reach a goal of full national employment that would keep the jobless rate at no higher than 3 per cent.
Across the public service, the Coalition has ordered departments and agencies to keep their "average staffing levels", or ASL, in line with the numbers from 2006-07, the final year of the Howard government.
Prime Minister and Cabinet boss Martin Parkinson in December labelled federal government-mandated caps on public service employment a "blunt instrument" for management, calling for new thinking on workforce capability and headcounts in Canberra.
Dr Parkinson also defended careful spending of taxpayer funds for external consultants in the bureaucracy.
The government's multibillion dollar spend on contractors will come under the scrutiny of a new parliamentary probe after the national auditor found massive growth in work going to consultancy firms since 2012-13.
