"The business case for it is less than clear. Every hour someone spends doing Work for the Dole is an hour not spent looking for work and there is also the risk that every hour someone spends providing labour at no cost to the boss, is an hour for which someone isn’t being hired."

She said she had not "formed a firm view about the program yet" but that it was time to have a conversation about whether $65 million was being well spent.

The program, first initiated by the Howard government, has been criticised for its low success rate, with seven out of 10 compulsory participants failing to find work. There have also been allegations of participants being placed in unsafe workplaces and exposed to asbestos.

Her comments come as the opposition puts itself on a collision path with employment services and businesses across the country, signalling it it is ready to tear up employment services contracts under the wider $7.3 billion Jobactive program, which faced a Senate inquiry on Thursday.

The inquiry heard employment consultants working at private job agencies are not required to have any formal qualifications and have the power to cut the payments of welfare recipients for failing to meet requirements, such as missing an appointment. Staff employed by the sector had a systemic turnover rate of 40 per cent, the inquiry was told.