Vic government working on plans to slash thousands of jobs from state’s public service

Premier Jacinta Allan has announced a review into the public service, as workers at government agencies and departments brace for mass cuts, with sources claiming more than 6500 public jobs could be axed.

The Allan government is working on plans to slash several thousands of jobs from the state’s public service in an expected “budget bloodbath”.

On Thursday, Premier Jacinta Allan announced a new independent review into the public service.

Treasurer Jaclyn Symes said up to 3000 jobs would be axed as part of a budget cleanout and

expected the cuts to produce “several billion dollars of savings” for the government.

It came after the Herald Sun revealed the public service was bracing for job cuts of almost double that size.

The Herald Sun can reveal workers at government agencies and departments are bracing for mass cuts after a wages bill blowout of almost $3bn in one year.

Senior public sector sources said the government was looking at cuts to the service’s 55,000-strong workforce of up to 12.5 per cent (potentially more than 6500 staff).

Unions have warned slashing so many jobs could be politically fatal for the Allan government Picture: NewsWire

The cuts, which will not affect frontline services, could include jobs in ministerial offices.

Ms Symes said the review was about “identifying duplication and inefficiencies” and old programs that were no longer serving victoria.

“There will be some difficult decisions to make, but they are important decisions, because, as I said, I am focused on ensuring that every cent taxpayer dollars goes to the priorities of Victorian communities,” she said.

Ms Allan said the review would have a “laser focus on every dollar of expenditure”.

Former Department of Premier and Cabinet secretary under the Brumby and Baillieu governments, Helen Silver, will lead the review.

A final report will be delivered to the government in June.

The Herald Sun’s front page on Labor’s latest claim on public job cuts.

Labor has been threatening to slash the public service for several years, with little result.

Shadow Minister for Public Sector Innovation, Brad Rowswell, said: “after a decade of wage bill blowouts, financial mismanagement and excessive public sector executive growth, Labor is now pretending to care about delivering value for taxpayers money.”

“This so-called ‘review’ into Victoria’s public services isn’t about greater efficiency - it’s a desperate attempt to pay for Labor’s record debt and soon to be million dollar an hour interest bill,” he said.

“This review will amount to nothing but hot air if it doesn’t consider the opportunity for digital transformation and innovation within Victoria’s public service.”

The growth of the public service has outpaced population growth, and grown faster than public sector workforces in NSW, Queensland and Western Australia.

The government’s wages bill has almost doubled from $18.8bn when it came to office, with expenses this financial year expected to hit $37.52bn.

In 2023, the government unveiled plans to axe 5000 workers in the biggest cull of the public service in over a decade.

But latest data shows the number of public sector employees in the state actually grew between July 2023 and June 2024 from 54,760 to 54,839.

Asked why Victorians should trust the government this time, Ms Symes said she was now in charge.

“I’m the new Treasurer of the State,” she said.

Ms Symes said she had made the decision to bring in former Department of Premier and Cabinet secretary and private sector executive, Helen Silver, to lead the review because previous attempts by her predecessor Tim Pallas “haven’t worked.”

“I’m determined that this process will deliver results that Victorians expect of me,” she said.

“This is going to be a punchy report.”

Premier Jacinta Allan with Treasurer Jaclyn Symes. Picture: NewsWire

Senior sources say the spiralling wages bill has become a major concern for the government which is forecasting debt to reach $188bn by 2028.

And that figure is tipped to blow out by billions in May’s budget, amid wage increases and ballooning major projects works.

Shadow treasurer James Newbury on Thursday slammed the public service review as a “hoax” and an attempt by the government to shield the public from the “truth of the budget overspend”.

“They’ve found themselves in quick sand again,” he said.

“All of these figures the government has tried to throw out today are more smoke and mirrors.”

It comes as leading credit agencies Moody’s and S & P Ratings have both repeatedly warned Victoria would face a damaging downgrade if it couldn’t rein in spending.

Such a downgrade would increase interest payments and further drive up the state’s soaring debt.

Last week, more than 70 fisheries officer positions were cut in what insiders say is the first sign of what was to come.

These jobs will be replaced with 36 fisheries engagement officers.

With uncertainty looming over cuts to more services Community and Public Sector Union secretary Karen Batt said: “Crazy, ill thought through proposals end up costing the government more as our population booms and demand for services grows.”

Premier Jacinta Allan. Picture: NewsWire

Ms Batt also warned cuts would be politically dangerous for the Allan government after major swings against Labor in this month’s Werribee by-election.

“I thought the government said they’d learnt from Werribee,” she said.

Labor’s John Lister scrapped through with just 50.71 per cent of the vote prompting Premier Jacinta Allan to say she had heard voters “loud and clear” and that the government needed to do more to avoid more voter backlash.

A government spokesperson refused to say whether job cuts would form part of this year’s budget or whether departments had been asked to meet specific targets to reduce the workforce.

But he did not dispute claims a 12.5 per cent target had been set.

“We are always focused on making sure that every dollar of investment goes to where it matters most — supporting families with cost of living and frontline services,” he said.

Treasurer Jaclyn Symes said this week she was considering new or increased taxes ahead of handing down her first budget, but emphasised her focus was on reducing cost of living pressures for families.

Plans for the mass job cull follow failed attempts to implement similar reductions in the public service resulting in significant budget overruns.

Public sector sources revealed that the Labor government had spent millions of dollars in external consultants to carry out “base and efficiency” reviews to find savings and cut jobs.

Consultancy disclosures show the Department of Premier and Cabinet spent more than $1.15 million for the Nous Group and Deloitte to assist with a review on staff cuts.

It’s understood tenders were also put out for The Department of Treasury and Finance, and the previously named department of The Department of Environment, Land, Water and Planning (DELWP).

The tender for DELWP was later shelved as departments struggled to deal with the pandemic.

The reviews did little to cap the ballooning public sector with the number of employees having increased from 47,396 in 2020 to 54,839 last year.