State budget reveals employee costs across the gov’t sector will rise over the forward estimates from $38.8bn to $42.4bn

Victorian Treasurer Jaclyn Symes’ promised to cut “some fat” from Victoria’s bloated public service while slashing jobs and merging departments but Tuesday’s budget papers reveal a $449m wages blow out.

Public sector wages will soar by $4.4bn over the forward estimates, despite Treasurer Jaclyn Symes’ promise to cut “some fat” from Victoria’s bloated public service while slashing thousands of jobs and merging departments and agencies.

Tuesday’s budget papers revealed total employee expenses will reach just shy of $38bn in the 2024-25 financial year, which indicates a $449m blow out on the figures that were last forecast by the Allan government in its December mid-year budget update.

Employee costs across the general government sector will progressively increase over the forward estimates — which take into account the 2024-25 financial year through to the 2028-29 financial year — from $38.8bn to $42.4bn.

Ms Symes sought to hose down concerns around the increased spending and said the year-on-year increase was largely due to new Enterprise Bargaining Agreements for the state’s police, paramedics, nurses, TAFE teachers and public sector workers.

But the figures don’t account for what is predicted to be only a small drop in expenses that will come when the government cuts “some fat” from the public service that could result in about 1200 full-time positions being slashed.

The general government sector includes the almost 60,000 bureaucrats inside the Victorian public service (VPS) but it also covers the thousands of cops, paramedics, nurses, teachers and firefighters.

Earlier this year, the Allan government ordered former top bureaucrat, Helen Silver, to undertake a review into the Victorian public service and find “overlaps, inefficiencies, functions and programs” that can be cut.

Victorian Treasurer Jaclyn Symes delivers her budget speech in the Victorian parliament on May 20, 2025. Picture: Getty

Some of the $3.3bn in savings outlined in Ms Symes’ first budget have been found through early stages of Ms Silver’s work, however the final review won’t be finished until next month.

Across Victoria, there are more than 500 entities and 3400 public boards and committees, which Ms Symes was a shocking figure.

“You can’t tell me that there’s not some fat in there,” she said.

As a result of Ms Silver’s review, the government is banking on slashing about 1200 full-time jobs, but that could end up being as many as 3000.

That, however, could take into account for already-vacant positions with many departments already undergoing freezes on hiring.

“Government had been put on notice (about spending), particularly when I announced the Silver review about reduction across the Victorian Public Service,” Ms Symes added.

“When people have been leaving, positions haven’t been filled, people have moved around, and the like.”

According to the budget papers, public sector wages will again rise to $39.8bn in the 2026-27 financial year – $449m more than what was forecast in December’s mid-year budget.

By 2027-28, costs will rise to $41bn before increasing to $42.4bn by the end of the forward estimates.

Victorian Treasurer Jaclyn Symes and the government is banking on slashing about 1200 full-time jobs, but that could end up being as many as 3000. Picture: Getty

Opposition Leader Brad Battin said the budget was “built on lies, fantasy forecasts and spiralling debt”.

“The government said last year they were also going to be looking at efficiencies when it comes to staffing costs and they’ve blown it out by $400m,” he said.

“We can’t trust what they say. They continue to mislead everyone in the community by putting out their forecasts and then not living anywhere near it.

“If you run a business like this, you would be broke.”

Originally published as State budget reveals employee costs across the gov’t sector will rise over the forward estimates from $38.8bn to $42.4bn