Centrelink customers are waiting an average of 16 minutes on hold, up from just three minutes in 2011, the Australian Auditor-General has found.
In 2012, Telstra won a AU$474 million deal with the Department of Human Services to provide voice, mobile and data services to the department when the super-agency was formed.
At the same time, Human Services began moving to so-called Smart Centres designed to reorganise the way calls within the agency are handled, so that staff can undertake both telephone and processing work, to improve the efficiency in dealing with issues within the service centres.
In an audit report (PDF) released on Tuesday, Auditor-General Ian McPhee found that one issue facing the agency is that not all desktop equipment was in place yet to allow staff to work across both telephony and processing work.
The agency is also moving more services online, and has trialled video conferencing, online transactional services, and has released apps to make it easier for users to deal with the agency without having to make a phone call.
In the past two years, this has led to a significant increase in the number of online transactions for the agency, up to 59.7 million in 2013-2014 from 48 million in 2011-2012.
By comparison, the agency received 43.1 million calls in 2013-2014, or 800,000 calls per week, while 13.7 calls were blocked or unable to reach the line.
Human Services spent AU$338 million on telephone services in the last financial year, but call times for Centrelink have ballooned from an average of 1 minute and 29 seconds in 2009-2010 out to 16 minutes and 53 seconds in 2013-2014.
The Telstra agreement was said to help reduce call wait times by "improving the capacity to distribute workloads, enabling the use of speech analytics to assist in analysing why customers call, and better queue management at the national level".
But the report found that the department had placed a higher priority on migrating the Medicare and Child Support systems to the new telecommunications platform, and the agency will not begin to realise the benefits of the Telstra deal for Centrelink call queues until later this year.
This will include a new workforce management system, call records, speech analytics, and the use of biometrics to authenticate customers calling.
However, reducing call centre waiting times down to five minutes would require a 33 percent increase in staffing, for 1,000 more staff at a cost of AU$100 million per year, Human Services estimated.
In line with whole-of-government policy, Human Services is also developing a digital strategy, but found that while people are beginning to conduct transactions with the agency online, it had not reduced the demand for calls as anticipated.
The Auditor-General has recommended, and Human Services has accepted, that the agency should develop a coordinated approach across all its communications channels.
Human Services also said in response to the report that more customers would begin to move online as the agency moves capability online with the replacement welfare payments system approved by the government in April.
"Over time, building on the changes since 2011, the Welfare Payments Infrastructure Transformation will bring fundamental changes to the way the department delivers services," Human Services stated.
"As the new system, and the department's business practices are modernised, the demand on telephony services will ease, delivering long-term solutions to the challenges raised in the report."
The first phase of this project received AU$60.5 million over four years in this year's federal Budget.