The Australian Taxation Office (ATO) plans to reduce its outsourced work by $500,000 in this financial year within its $4.5 billion annual budget. The Australian Services’ Union was surprised by the small amount and checked if it was a typo. Senator Barbara Pocock called the figure "woefully inadequate" for such a big agency. She criticized outsourcing as "wasting taxpayer dollars" and weakening the public service. This small cut comes after the ATO reduced external spending by $80.4 million last year. The ATO faces criticism over its reliance on outsourced debt collectors and call centres, which have high staff turnover and poor service complaints. The Labor government in 2023 urged agencies to bring core work back in-house under a strategic commissioning framework. Services Australia also cut contractor costs by $733 million in 2023-24 but set a much smaller reduction target this year. The Department of Employment and Workplace Relations (DEWR) refused to set targets to reduce outsourcing despite using 15% contractors, including sensitive call centre workers. A union official says vulnerable cases should be handled by trained public servants. Experts say government agencies rely on outsourcing as a supposed cost saver, but this often leads to lower-paid, unstable jobs without quality service. An ATO call centre worker has filed a "same job, same pay" claim, highlighting pay and training gaps between contractors and public employees. Emmanuel Josserand, a management professor, called outsourcing "an illusion" that transforms good jobs into "high pressure, lower paid" roles while generating profits for companies. He warns that agencies are easily lured into costly outsourcing despite poor results.