4000 public servants to be axed in ‘rebalancing’ act

Up to 4000 public service jobs will be axed in the next 12 months as the Andrews government starts a “rebalancing” process to slash $2.1bn from the sector.

Up to 4000 public servants will be axed as part of a ‘rebalancing’ budget. Picture: Nicki Connolly

Up to 4000 public servant jobs will be axed within the next 12 months, as the government begins a “rebalancing” process to slash $2.1bn from the public sector over the next four years.

Despite the looming cuts, employee expenses across government are still forecast to grow by 8.4 per cent to $38.27bn over the forward estimates, as a 3 per cent annual pay policy increase starts to bite.

More than half of all government departments will be required to spend less than they are now, while state coffers are expected to hold nearly $6bn in contingency funds over four years.

The Herald Sun earlier this year revealed Department of Treasury and Finance secretary David Martine wrote to all departments warning they would need to cut at least 10 per cent of their spending.

Frontline services will not be affected in the shrinking of the Victorian public service.

But several departments – including the Department of Justice and Community Safety, Department of Health and Department of Energy, Environment and Climate Action – will all experience tighter budgetary pressures with less spending allocated.

Victorian Treasurer Tim Pallas in his office with the 2023-2024 State Budget report. Picture: David Caird

The Departments of Premier and Cabinet, Government Services, Transport and Planning and Jobs, Skills, Industry and Regions will also have their spending levels reduced.

Some of these drops are likely due to Covid funding coming to an end or no longer being deemed required.

Meanwhile, the Departments of Education, Treasury and Finance, and Families, Fairness and Housing will enjoy increased availability for spending.

In 2023-24, government coffers are set to hold $4.95bn in output contingencies – not allocated to departments.

This figure will increase year on year over the next four years, estimated to reach $10.54bn by 2026-27.

Treasurer Tim Pallas said scaling back government spending was one of the three key elements from his plan to claw back the state’s whopping $31.6bn Covid bill.

He said the savings are designed to make the government’s spending “more efficient” while “rebalancing the size of the public service”.

“The government will do its bit, restoring the public service back towards pre-pandemic levels, while not affecting frontline workers,” he said.

“We’ll make savings across government, totalling $2.1bn over four years, with reduced corporate and back-office functions and less spending on consultants and labour hire.”

Employee expenses for non-departmental workers across agencies like the Suburban Rail Loop Authority and Level Crossing Removal Authority are also set to be wound back over the coming years – from $1.7bn in 2023-24 to $1.63bn in 2026-27.

CPSU secretary Karen Batt says the cuts will lead to service delays.

Community and Public Sector Union secretary Karen Batt slammed the move and warned the cuts would lead to service delays.

Ms Batt said every announcement and funding initiative required public sector workers to deliver the services.

“The government seems to have forgotten this key ingredient with this budget,” she said.

“If their desire is quality services for Victorians then the budget cuts are counterproductive to achieving this desire.

“It seems we’ve moved from borrowing to protect jobs to cutting jobs to protect the borrowings.

“Every year every budget builds in forward estimates and there’s no reason this time to cut so heavily in this manufactured time frame accept to fiddle the forwards in a cynical political exercise.

“People should come first and public sector workers have families and face cost pressures like everyone else but our members are also passionate about delivering quality public services.

“Therefore I want to apologise in advance to all Victorians and say that under this government’s budget and without enough staff we will not be in a position to achieve the quality nor time responsiveness on services Victorians should expect.”

Ms Batt urged Victorians to direct their frustration to their local government MP.

Originally published as 4000 public servants to be axed in ‘rebalancing’ act