The proposed outsourcing of Australia’s visa processing system is shaping up as an election battleground after the federal government released formal tender documents the day after parliament ended for the year, and Labor vowed to dump the plan if it won government.

The long-running plans by the Department of Home Affairs have been touted as a means of addressing rampant delays and problems with the current system, but have drawn accusations of cutting jobs and risking national security if they go ahead.

The department released formal tender documents on Friday for the 10-year contract and included dates that suggested early phases would be completed well before the budget and the presumed date of the federal election.

The documents said a final agreement with the winning bidder, widely estimated to need an investment of around $1bn from the operator, should be finalised in October.

Between September 2017 and July this year, the government worked with two final shortlisted respondents on co-designing the system in what it has termed a “public-private partnership”.

The two proponents have been reported as a consortium from Australia Post and Accenture, and another group led by Scott Briggs, a Liberal party figure with strong links to the prime minister, Scott Morrison, the former prime minister Malcolm Turnbull and the immigration minister, David Coleman.

Senate estimates revealed in October that Morrison and Coleman had both recused themselves from the approval processes.

According to the tender documents, the system would be fully financed, built and operated by the provider, which would also bear the associated risks, including any drop in visa applications.

The government’s $2bn in annual revenue from visa applications would be protected but the operator would be able to make its own profits from service fees – set by the department but about $35 per visa – including calculating in the cost of providing the government service.

“The department is also seeking to enrich the clients’ user experience and service levels utilising a future business model that provides, on a strictly opt-in basis, individualised access to a range of additional commercial or government services and information,” the documents said. “The inclusion of any commercial service on the platform will be subject to the department’s approval.”

The first tranche of visas the new operator would take over would include all short-term visas and one longer-term visa.

The documents state the new system must consider any threat to Australia’s national security or interests by the applicant, and the applicant’s health.

The tender documents state accountability and responsibility for decisions would remain with the department but Labor has accused the government of risking national security implications.

The opposition spokesman for employment and workplace relations, Brendan O’Connor, said on Sunday that to “allow for private operators to make decisions on national security matters that actually intersect with national security decision making – is fraught with risk”.

The opposition immigration spokesman, Shayne Neumann, said Labor would oppose the outsourcing, which he described as “privatising one of the most important functions of Australia’s border control system”.

Prior to the release of the tender documents, Neumann also wrote to the home affairs minister, Peter Dutton, to set out Labor’s objections.

“The privatisation of visa processing threatens the loss of thousands of [Australian public sector] jobs and puts at risk the privacy of applicants given the transfer of personal data to a private provider,” Neumann said.

“The secretary of the Department of Home Affairs says that an ‘accountable human decision-maker’ will be ‘ultimately accountable’ for visa decisions – including security and risk assessments – however Labor is concerned this oversight may be tokenistic if the bulk of the processing work is being privatised.”

In 2017-18 the department received about 9m visa applications, with increases in almost all categories.

In the year to November, processing times for permanent partner visas has increased by three months, and processing times for 90% of applications are now 25 months.

“Current visa service delivery arrangements are increasingly unable to keep pace with the continued strong growth in visa applications, which is expected to see 3% growth to over 13m applications per annum over the decade to 2028-29,” the documents said.

“Current processing arrangements are resource intensive and dependent on ageing information technology infrastructure. Manual processing of large volumes of applications increases the risk of errors being made, as well as of fraud.”

The department secretary, Michael Pezzullo, told Senate estimates there would be no public service job losses under the plan but the Community and Public Sector Union has estimated about 3,000 public-sector jobs across almost every state and territory would go.

“This government seems unmoved by the 3,000 jobs that are at risk under its plan, and completely oblivious to the disastrous experience of other countries that have already gone down the visa privatisation path,” the CPSU national secretary, Nadine Flood, said.

“Ordinary Australians will bear the brunt if it’s allowed to proceed, particularly those who were born overseas. Visas are already far from cheap here in Australia and costs have risen rapidly in the UK in just a few years since visa processing was privatised there.”