One APS4 labour hire role cost almost $400,000

The Department of Veterans' Affairs published a contract notice for a "clinical practice officer" advertised in Victoria or Tasmania, with the contract starting in January this year and set to run until November 2023.

At an estimated cost of $388,000 across the almost three-year contract, the cost works out well above what an APS4 employed by the department would earn, usually between $71,000 and $76,000.

According to an answer to a question on notice, that big price tag includes $302,167 in remuneration for the role, including salary and superannuation, as well as $17,594 in "on costs" and a $32,966 agency fee, and $35,273 in GST.

Labor Senator Katy Gallagher interrogated Finance Minister Simon Birmingham about the use of contractors in this way in Senate estimates this week.

"You're paying nearly $400,000 for an APS4," Senator Gallagher said.

In January it was revealed the Department of Veterans Affairs had the highest use of labour hire throughout the public service, at 42 per cent of the workforce. That number has since dropped to around a third, and Secretary Liz Cosson has conceded that level of labour hire is "not sustainable".

In a previous hearing the department said it often negotiated a 12 per cent margin with the labour-hire companies.

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A Finance official pointed out the department received a 500-person boost to its average staffing level cap in the most recent budget. Senator Birmingham said the department had made the case to the government for the cap to be increased.

"The government cares about each agency operating at the maximum level of efficiency for the delivery of the services or the functions that it is expected to deliver," Senator Birmingham said.

"The cap is an important principle for each agency in relation to them setting their own expectations, and living within those expectations."

He also said in some cases, like specialised roles in specific areas of the country, it made more sense to use labour hire.

"There may be very viable and reasonable needs as to why you would use those sorts of contracting outcomes," Senator Birmingham said.

"There are obviously on-goings associated with permanent recruitment, that aren't always associated with contract arrangements, and so forth."

Senator Gallagher accused Finance of not having a proper picture of hose labour hire was being used across the public service.

"It seems nobody understands the extent of the use of labour hire, the arrangements that they are used, particularly to get around the ASL. And there is no central understanding or interest in what is going on," she said.

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