A tale is emerging of Australian Tax Office senior staff taking a break in luxury, while thousands of foot-soldiers fight to save their jobs.

The ATO says it has held an “appropriate” and “cost effective” conference in five-star luxury at Canberra's Realm Hotel. About 250 ATO senior executives were invited to mark the first forum under the ATO’s new management group.

The Canberra Times has reported the bill for the venue hire, audio visual hire, catering and parking hit $101,000 with a further $37,000 spent on hotel rooms for 168 inter-state attendees.

Leader of the Opposition in the Senate, Penny Wong, says the conference was inappropriately expensive, given that the ATO will soon shed up to 3800 public servants to cut costs.

“(Treasurer) Joe Hockey might say the ‘age of entitlement is over’, but the ‘age of austerity’ hasn’t arrived in his portfolio with a one-day function for senior executives at a five-star hotel costing taxpayers $100,000,” Senator Wong said.

“How can Mr Hockey justify spending $100,000 on a single staff function when his cuts mean the axe hangs over the head of 3800 workers in the same agency. This is another example of the Abbott Government’s twisted priorities.”

An ATO spokesperson has told reporters that The Realm was the best venue for the conference.

“This was chosen as the venue because it was one of the few available, had appropriate facilities, was cost effective and convenient,” she said.

“The cost for accommodation was negotiated at $228 per night per traveller, which is the same as the allowance rate for SES staying overnight in Canberra. Canberra-based SES did not stay overnight at the venue.

“Those SES travelling from interstate took the opportunity to attend business meetings, resulting in travel costs being used for multiple business purposes.”