Victorian public servants in the gun as government takes razor to departments

Workers in multiple Victorian government departments face job cuts as Treasurer Tim Pallas wields a budget axe in the face of soaring debt. Here’s who is most at risk.

HealthShare Victoria workers may be the latest public servants to receive word many of their jobs are set to go — but they are far from the only ones facing the prospect of unemployment soon, as the Allan government desperately tries to cut spending ahead of its May Budget.

Treasurer Tim Pallas warned Victorians in January this year to prepare for a “very, very tight” Budget, adding the government would have to “make choices”.

It followed a Budget update revealing the state’s debt had blown out by billions of dollars.

In December last year, it was revealed Victoria’s debt bill was set to reach $135.5bn by June, and a whopping $178bn by 2027.

Since the treasurer’s ominous warning, the Herald Sun has reported workers in public sectors from health to Big Build face losing their jobs as part of sweeping, cost-saving measures, while hospitals, the arts and grassroots sporting groups could also suffer painful funding cuts.

Community and Public Sector Union spokesman Julian Kennelly told the Herald Sun on Thursday there was “no blood left in the stone”.

“We don’t know what’s going to happen in this budget, but there’s not too much left of our areas . . . mind you, they’re not cutting numbers on boards or executives,” he said.

Mr Kennelly said Victoria’s health sector, networks and hospitals were now in the government’s gun, as it desperately tried to find more savings with wider, deeper cuts.

He said it was “a myth by government spinners” that the looming restructure of HealthShare Victoria was “just returning things to normal post Covid”.

“They’re going much further than that,” Mr Kennelly said.

Here's how it’s unfolded so far.

Victorian Treasurer Tim Pallas in parliament. Picture: Luis Enrique Ascui

April 17, 2024: HealthShare Victoria

Workers at the state’s medical supplies purchasing agency revealed they were bracing for mass job losses.

Staff at HealthShare Victoria — a service that bulk-buys medical supplies and distributes them to hospitals — said they were expecting to be told positions would be cut statewide.

Multiple HealthShare ­Victoria staff anonymously ­revealed that management had been booking in “chats” with staff across the state, and they had been told the meetings were in regard to “budget pressures”.

However, they said management had remained tight-lipped on how many redundancies would be needed and which staff would lose their jobs.

It’s understood agency ­employees across the state are at risk, including workers ­stationed in hospital purchasing units.

A Victorian government spokesman said: “During the pandemic, HealthShare Victoria’s role expanded and now we are taking it back to its original role of boosting our purchasing power to lower the cost of critical health supplies for hospitals to ensure we are spending taxpayer dollars responsibly and avoiding waste.”

HealthShare Victoria (previously Health Purchasing Victoria) was formed under the Andrews government in January 2021 to develop a single statewide supply chain for critical health supplies, after there were shortages of basic items when Covid started.

April 4, 2024: Regional hospitals

Regional hospitals warned they faced “inevitable closures” or sweeping job losses after a Victoria-wide order to slash costs ahead of the state budget.

Leaked internal briefings revealed bosses at multiple country health services have warned the forced “unrealistic” savings targets are unsustainable.

Regional hospitals fear closure.

Some reported multimillion-dollar deficits last financial year and say there is no way to cut costs without affecting frontline services.

The directive to slash costs came from the Victorian Department of Treasury and Finance to all 76 health services and had individual targets across the next three financial years, under what are called Financial Management Improvement Plans.

Some services have been ordered to find millions of dollars in savings, but are being urged by the Department of Health to start with “back of house” functions, such as corporate services, and by making administrative roles redundant when they become vacant.

March 23, 2024: Big Build road and rail staff

The Herald Sun revealed hundreds of white collar jobs were set to be slashed across the state’s Big Build as road and rail projects wrapped up and the government tried to rein in costs.

Premier Jacinta Allan and former Premier Dan Andrews at the Westgate Tunnel construction site. Picture: Josie Hayden

Large-scale redundancies are expected as the finishing touches are put on the $14 billion Metro Tunnel and $10.2bn West Gate Tunnel and projects are “demobilised” before opening next year.

Combined with a broader slowdown in the state’s bulging infrastructure pipeline, which had been running at capacity or beyond for the past year, expectations are growing of a major jobs crunch.

March 3, 2024: Sport and arts

The arts and grassroots sporting groups reveal they fear major funding cuts that could critically damage some.

Government agencies could also bear the brunt of the “slash and burn” budget, while departments have been warned “there is no money in the cupboard”.

Senior government sources said there was frustration that last year’s budget failed to take the hard decisions needed to restore Victoria’s economy.

They said numerous recommendations from treasury officials about cutting spending were ignored by former Premier Daniel Andrews’ private office.

It meant this year’s state budget was shaping up to be worse than it otherwise needed to be.

January 23, 2024: Pallas warns on ‘very, very tight budget’

Victorian Treasurer Tim Pallas warns Victorians should not expect to see the spending that occurred during the Covid pandemic peak, as the state moves into a mode of “repair”.

He hints the renewed focus on cutting expenditure means a range of government services and programs are on the chopping block.

“I am expecting it to be a very, very tight budget,” Mr Pallas said.

Tim Pallas warned a tight budget was coming, and choices would be made. Picture: Luis Enrique Ascui

“Can I be clear, this government is not shirking its responsibilities in acknowledging the challenges we confront.

“Believe me I am looking very closely at all the expenditures that government is making and we will make choices.”

Spending on health and Covid-related expenditure looks likely to be slashed in the May budget.

October 12, 2023: Justice staff axed

Fears were raised for community safety after almost 300 department of justice staff were axed in mass job cuts, including workers who manage some of Victoria’s highest-risk offenders.

About 280 public servants have been told they no longer have a position or could be redeployed after an online meeting was called with Department of Justice and Community Safety staff.

It’s understood that among roles axed were Corrections Victoria advanced case managers and their supervisors, who deal with high-level offenders sentenced to a combination of jail time and community orders, including sex offenders, family violence and other violent offenders, drug traffickers and those who commit burglaries.

October 13, 2023: Restructures mooted

It was revealed another 500 public servants were set to lose their jobs as part of government-wide job slashings, with a key union warning essential services could be put at risk from massive departmental restructures.

Health departments have been consistently in the firing line, when it comes to job losses.

Hundreds of workers were told they would be axed from the public service.

Up to 220 jobs within the Department of Jobs were revealed set to go and 300 roles within the Department of Health.

Community and Public Sector Union Victoria assistant secretary Wayne Townsend confirmed “cuts of this magnitude”.

“We’ve got serious concerns about the potential loss of services to the community,” he said.

“It’s not possible to axe this many jobs and still provide those essential services.”

August 27, 2023: Mass public servant job cuts warning

The Herald Sun revealed Victorian public servants were bracing for mass job cuts across key government departments.

The state government confirmed it was taking the knife to the public service, but refused to say which departments were being targeted or how many jobs loss were expected.

Senior public servants said significant departmental restructures could put hundreds of jobs at risk.

The Department of Justice and Community Safety, the Department of Government Services and the Department of Energy, Environment and Climate Action were all understood to be undergoing major restructures, with up to 20 per cent of all executives to be cut from the Department of Health.

It was previously revealed that, ahead of May’s state budget, all government departments were ordered to cut 10 per cent of ongoing staff, putting more than 5000 jobs at risk.

The move foreshadowed the biggest public service jobs cull in more than a decade.

July 9, 2023: Health, hospitals in gun

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

A video obtained by the Herald Sun shows Euan Wallace advising staff that major spending cuts were being weighted for the health sector.

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