DHS spokesman Hank Jongen said the union's assertion about jobs was "completely wrong". The department says Telstra will "partner" with DHS to deliver the telephone services and train public servants in "industry best practice" using the telco's expertise in "contact centre management". The move toward Telstra handling calls for Centrelink and Medicare follows the government's call for private players to bid for Medicare and Veterans' Affairs payments. The Canberra Times revealed last week that the Australian Taxation Office was mulling a proposal to move outsourced IT work to the Philippines. It was unclear from the internal Human Services announcement what the department planned for the 7000 public servants who work in 28 "smart centres" around Australia, and the main public service union, the CPSU, says their jobs are at risk. Mr Jongen said the plan involved Telstra workers in the departmental building in Bunbury, WA and Queanbeyan, outside Canberra, taking calls.

But the DHS spokesman said the deal would "complement" rather than replace the existing workforce. He also said the telco would be able to engage a third party to help do the work but that none of the activity would be done overseas. The union said staff were shocked to hear about the move, and worried it may lead to public sector jobs being outsourced or moved offshore. "Staff are shocked and dismayed at the news," CPSU national secretary Nadine Flood said. "They do a fantastic job for millions of Australians every day and now they face seeing their work getting outsourced. Human Services workers handle everything from your gran's pension, your own medical records, as well as provide vital support in times of emergencies such as drought or bushfires.

"The work is too important to outsource and most Australians would be appalled to hear that their records might be sent offshore." Telstra has sent thousands of jobs to Asia and the union says the reference to a "third-party provider" has an ominous note. "Telstra has third-party providers in Australia and throughout Asia," Ms Flood said. The announcement to staff said Telstra's involvement would start with inquiries on "public activities". "Initially, the work would focus on Centrelink and Medicare public activities such as requests for replacement concession and Medicare cards, appointment bookings, general queries and other transactions like BasicsCard balance updates," it said. But a spokeswoman for the telecommunications giant said in a statement that it had not signed a contract with DHS.

"Telstra has not entered into an agreement to take over contact centre services for DHS," she said. "We are currently discussing a potential pilot out of the department's call centres in Bunbury and Queanbeyan to help improve contact centres services. This does not result in any job losses for DHS." In his statement, Mr Jongen said an arrangement had been proposed but the details were still being worked out. "This arrangement is designed to complement the department's existing service delivery workforce," Mr Jongen said. "By managing the work this way, our skilled staff would be able to focus on complex customer inquiries," he said.