By chief political correspondent Emma Griffiths
Related Story: Union anger about Centrelink job shedding
Labor and the unions have leapt on reports the Abbott Government is considering a plan for Australia Post to take over Centrelink's front office operations.
Treasurer Joe Hockey is known to be in favour of consolidating service delivery and has put "everything on the table" for the Government's newly formed Commission of Audit.
That includes a proposal which could mean closing Centrelink's service centres and job losses, the Australian Financial Review reports.
A spokesman for the Treasurer says there are no recommendations before Government yet and nothing will be considered from the Commission of Audit before the budget process begins.
But Opposition Human Services spokesman Doug Cameron says it would compromise Centrelink's "specialised" service delivery.
It's not simply about rocking up (and) getting your payment.
Labor senator Doug Cameron
"We need high-level government capacity to look after people that are down and out," he told Radio National.
"People who can't find work, people who have got significant personal problems in some cases - I don't think the local post office is capable of dealing with that.
"It's not simply about rocking up (and) getting your payment.
"That's why we've got professional public servants in face to face delivery with the public."
Australian Council of Trade Unions (ACTU) president Ged Kearney says the proposal bolsters the union's argument that the Commission of Audit currently lacks transparency and accountability.
"Millions of people rely on the services of Centrelink," she said.
"This is an enormous thing that would need to be looked at.
"And there are services here that will impact on many, many Australians.
"Australians have a right to be consulted about this process."
The Commission of Audit is due to deliver an initial report by the end of January and give its final recommendations by the end of March.
Centrelink currently handles payments for retirees, the unemployed, families, carers, parents, students, people with disabilities, Indigenous Australians and emergency payments for victims of natural disasters.
About 50 of its offices have already merged with Medicare under a process initiated by the previous Labor government, which is due to continue until 2015.
