Anthony Albanese says federal bureaucrats should look for “value for money at all times” despite the government rejecting expert calls to tighten the rules around expensing short-haul business-class flights.

Amid the growing expenses saga roiling Labor, the Department of Finance has opted not to take up a recommendation that public servants only be permitted to book business-class fares on flights of three hours or more, up from the current two-hour threshold.

The recommendation was proposed as part of efforts to make savings from the nearly $1bn travel bill for government departments and agencies.

It would have excluded flights where a higher class of travel was required as part of employment conditions or Remuneration Tribunal decisions.

A review commissioned by Labor before the federal election warned that while business-class travel makes up just 4% of domestic bookings by public servants, it accounts for 8% of domestic travel spending.

For international bookings, business class accounts for 25% of bookings but 45% of total costs.

Flights between Canberra, Sydney, Melbourne, Brisbane and Adelaide, in both economy and business, account for about 60% of all government flight bookings.

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The report, commissioned as part of Labor’s aviation white paper process, said the savings from the one hour policy change would be in the order of $5m each year.

In 2024-25, the government spent $953m on travel through the centralised public service system. The spending does not include federal politicians and their staff, or government-owned businesses.

But in its response to the report, the government said an overhaul of travel rules for bureaucrats “will not mandate the use of economy class travel” for flights under three hours.

“The current settings are appropriate,” it said.

At an event to promote the government’s social media ban for children under 16 on Thursday alongside the communications minister, Anika Wells, Albanese said spending should not be extravagant.

“I haven’t seen the review, but certainly people should look for value for money at all times,” he said.

Wells’ expensive travel to New York for an event alongside the UN general assembly sparked scrutiny of travel rules for federal MPs, including controversial family reunion provisions which see taxpayers foot the bill for flights for politicians’ family members.

On Thursday, Guardian Australia revealed expenses rules are so broad that ministers and senior politicians have “unlimited” travel entitlements for their spouse.

Politicians embroiled in the growing expenses scandal – including Wells, Albanese, the trade and tourism minister, Don Farrell, and others – have defended their use of the family travel rules to bring their spouses and children to events such as the Australian Open and major NRL and AFL matches, saying it was within the rules.

An explanatory document about the regulations says spousal travel for senior office holders is “relevantly unlimited in respect of total expenses claimable each year”.

Senior office holders include government ministers, the Senate president, House of Representatives speaker, opposition leader and deputy opposition leader.

The white paper review recommended data on public service travel costs be routinely published, similar to data released by the Independent Parliamentary Expenses Authority, which tracks politicians’ travel.

Finance said it would begin publishing the data from early 2026 after further consultation. It could include annual figures on routes of travel, airline choice and costs, as well as accommodation and ground transport costs.

Albanese has rejected calls for reform or an inquiry into politicians’ expenses and travel perks.