Vic: Job Cuts Fraud

The state government is dramatically lifting its spending on temporary workers and contractors in the public sector to nearly $1 billion - at the same time as it lays off more than 4000 staff.

The leap in spending on temporary workers is detailed in government contracts that reveal a big rise in the use of temporary administrative staff, information technology workers and consultants.

The $930 million expected to be spent from 2011 to 2014 compares with the government's outsourcing contract for 2006-2008, which was worth about $200 million.

Among the firms to benefit from the current outsourcing contract are labour hire giants Hays, Hudson and Randstad.

Agreements with seven labour hire firms were signed in 2011, just months before then treasurer Kim Wells announced plans to cut 3600 public service jobs. This cut would save the government $998 million over three financial years, according to a budget update released in December 2011 when Mr Wells made the announcement.

In last year's budget the government announced it would axe another 600 public service jobs, meaning 4200 public servants will go by the end of this year.

Opposition industrial relations spokeswoman Natalie Hutchins said there were now doubts over whether the government was saving money through its redundancy program.

''This government prides itself that it is running sustainable budgets, [but] how sustainable is it to sack 4200 people and put out a $1 billion contract for casual labour?'' she said.

Ms Hutchins said the move was ''about making the public sector more insecure, the delivery of services more questionable''.

A former senior public servant said labour hire staff and temporary workers were used by government departments to hide spending on wages and to disguise how many workers they used. Spending on labour hire could be reported in accounts as ''capital expenditure'' rather than staff costs, he said. ''It is a tried and true method way of hiding the cost.''

He said some departments now had more than one-fifth of their staff employed from labour hire or as non-permanent workers.

Community and Public Sector Union state secretary Karen Batt said the government was moving to replace the permanent public service.

''The government is spending $300 million for the most recent round of redundancies while utilising sham contracting through labour hire for just under $1 billion,'' she said.

Ms Batt said the government had ''perpetuated a political fraud'' over its redundancy program.