Health department told to make $50m in cuts or about 305 full-time staff

Health sector workers are in the firing line as footage shows the head of Victoria’s health department “spill the budget beans” on how many staff face the sack.

The head of Victoria’s health department has flagged cuts to hospitals and health services, also revealing more than 300 public service jobs in the sector are on the chopping block.

A video obtained by the Herald Sun shows department secretary Euan Wallace last week advising staff that major spending cuts are being weighted for the health sector.

He warns a larger share of savings would have to come from the broader health sector, which covers government-funded areas such as hospitals and services.

A new health finance board is being set up to find “efficiencies” and a Cabinet “implementation subcommittee” is being briefed on ways to roll out the government’s efforts to bring the budget back under control.

The Andrews government is looking to get its budget under control. Picture: David Crosling

The Herald Sun revealed earlier this year that thousands of public service jobs would be cut in an effort to repay the state’s massive debt.

In the footage, Prof Wallace acknowledged there was uncertainty among the workforce about the cuts required.

He said the government wanted to save $175m across the public service and $544m in full-time staff funding for next year and onwards.

For the health department, this meant finding $50m in cuts, or about 305 full-time staff.

But Prof Wallace said savings would not just come from the public service, with health services and hospitals making up a much larger share of costs.

“We have a $27bn budget all up and of that, about $800m is the department and the rest is out there,” he said.

“Given that ratio, the bulk of our savings, and efficiencies need to come from (the health) sector.

In the video, Professor Euan Wallace flags cuts to hospitals and health services.

“We need to work very closely with our health service providers or partners and that work is already underway.

“We have a third of government expenditure. So there is a significant task ahead of us if the government is going to meet its budget targets.”

Prof Wallace revealed he was setting up a health finance board where he would meet with the secretary of Treasury and the Premier’s department regularly to discuss how money was spent.

Community and Public Sector Union state secretary Karen Batt slammed the revelations.

She said they were meant to be discussing how to manage the savings demand while protecting vital jobs but the government had already identified 300 staff to go.

“Prof Wallace has essentially spilled the budget beans of a sustained program of cuts to our health and community services this financial year and in future years,” Ms Batt said.

“This extent was not disclosed to parliament’s budget oversight committee recently and we were told the savings were to be one off, protect services, and be this year only.’

Ms Batt said government departments were “top heavy” and said the savings should come from higher up.

She said the fact a Cabinet subcommittee was being briefed on the cuts showed they were a “done deal” rather than being negotiated in good faith.

“Fancy being so out of touch with the demands in health that you set up a razor gang and call it a health finance board and still believe in a vision that Victorians will be the healthiest people in the world,” he said.

Opposition health spokeswoman Georgie Crozier said: “These job losses are a result of the Andrews Government’s waste and mismanagement of Victorian taxpayers money in projects that have blown out by tens of billions of dollars, and debt that is soaring out of control.

A government spokesman said:

“The Department of Health and our health services provided an incredible emergency surge response during the pandemic but we are now rebalancing the public service to pre-pandemic levels. Frontline services are not affected.”