A $36 million fit-out at an Australian Tax Office building in Melbourne is set to slash floor space and could introduce more hot-desking.

The ATO has revealed a new plan to convert its Moonee Ponds office to a new “flexible” layout.

More than 1200 tax officials will have their floor-space slashed by one-third

A union for ATO staff says the new plans will leave more public servants working on tiny, shared desks.

“We like to believe the tax office will behave with integrity and be open and transparent when it consults with us about changes it wants to make with our work or our workplace,” Australian Services Union official Jeff Lapidos told Fairfax.

“Unfortunately, the tax office is not meeting our expectations when it comes to its proposals for new leasing arrangements for its Moonee Ponds office.”

The ATO has not confirmed or denied the prospect of hot-desking.