'Big government is back', but how long can the public service boom last?

But new figures show temporary staff make up half the growth, raising fears that more public servants will experience insecure work.

Employment numbers show the headcount of Australian Public Service staff grew 2.3 per cent in the 12 months to June this year, reaching nearly 154,000 staff.

The figures, in the public service commission's latest statistical bulletin, show staffing has nearly matched levels in the final year of the Howard government in 2007 but has not recovered to 2013 numbers.

Public management expert at the University of Melbourne, Janine O'Flynn, said the latest figures reflect the need and community expectation for big government during the pandemic.

"Big government is back, even for political parties that have long made the case for smaller government," she said.

"During COVID it is unavoidable in the short to medium term crisis itself, and longer term in the political reality of community expectations of government being out front and protecting Australians. Markets cannot solve this mega-crisis."

The Coalition flagged it was discarding some restraints on public service staffing in the May federal budget.

Finance Minister Simon Birmingham surprised critics of the staffing restrictions, saying the government had accepted it was more "efficient and effective" to use ongoing public service staff as it expanded the bureaucracy in the pandemic.

Despite growing the public service's overall staffing by more than 5000 in the budget, and surpassing a ceiling on staff levels it had maintained for several years, the government kept its portfolio-level caps on public servant numbers.

The latest employment figures, released this month, show about 50 per cent of the staffing increase last fiscal year was made up by non-ongoing staff - those employed for fixed terms, or to execute particular tasks, or on a casual basis.

Non-ongoing staff now make up 13 per cent of the APS, the highest rate since the data began in 2001.

An Australian Public Service Commission spokesperson said the growth in non-ongoing staffing reflected increased demand for help delivering the government's COVID-19 response.

Community and Public Sector Union national secretary Melissa Donnelly criticised the growth in non-ongoing staffing, saying the public sector was not immune from the "scourge of insecure work".

"Government capability to deliver for the community relies on the APS being staffed by highly skilled and knowledgeable career public servants," she said.

Ms Donnelly said the government's staffing limits made it harder for the public service to do its job, and forced agencies to work around them by hiring labour hire staff.

Commonwealth employers have told Senate hearings that up to 40 per cent of their workforce is labour hire staff.

"The government's own budget papers acknowledged these very problems, but fell short of taking meaningful action to address it," Ms Donnelly said.

The public service commission's spokesperson said some of the staffing growth in the budget was temporary and linked to short-term measures relating to the pandemic.

However, the spokesperson said there would be modest underlying growth in public service staffing over the medium and longer term.

"Agency heads remain responsible for managing their workforce within their resources and providing the right mix of staff to accommodate organisational requirements," they said.

Agencies may request additional staff when they cannot deliver new activities within existing staffing resources, the APS commission spokesperson said.

Professor O'Flynn said the staffing caps were a blunt instrument that had nothing to do with matching the capacity of APS agencies to government policy and strategy. The caps had more to do with politics, she said.

Two agencies responsible for delivering critical parts of the government's COVID response have driven much of the latest staffing growth.

Welfare agency Services Australia, which is delivering disaster payments to people losing income during lockdowns, grew by 2300 staff in 2020-21.

Services Australia hired nearly 3000 more non-ongoing staff last fiscal year, but shed 600 ongoing staff.

The agency has also turned to multinational firms Serco and Datacom for help responding to surging demand during the pandemic, signing contracts worth tens of millions of dollars.

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More recently it has relied on volunteers from other federal agencies to bolster its workforce during periods of higher demand in response to lockdowns.

The agency has shed thousands of staff in recent years.

The Health Department's staffing also grew 11 per cent, or nearly 500 employees in 2020-21.

About 120 of its new hires were non-ongoing employees.

Professor O'Flynn said Services Australia had needed to expand as demand on the system grew, and to head off any potential political backlash as many people encountered the reality of the welfare system, maybe for the first time.

The increase in Australian Public Service staffing more broadly was also necessary, she said.

"I am not sure it signals a change in government preferences for staffing policy, but rather it has had no other choice."

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