By Kieran Rooney and Chip Le Grand
Victorian Treasurer Jaclyn Symes has declared the state’s sprawling public sector bureaucracy a “handbrake on productivity” as she announced a $4 billion savings plan that would abolish or merge dozens of public entities.
The Allan government will also strip 332 executive and senior technical jobs out of the Victorian Public Service and 1000 jobs in total, about half the number recommended by the state’s former top bureaucrat Helen Silver in a review released on Thursday.
The review was labelled by the Coalition as an admission of guilt about Labor’s financial management, while unions and advocacy groups railed against proposals to reduce jobs or remove existing bodies.
Treasurer Jaclyn Symes announced the government’s response to the Silver review on Thursday morning.Credit: Wayne Taylor
The Independent Review of the Victorian Public Service, which was commissioned by Symes in February shortly after she moved into the job, urged the government to take “immediate action” to reduce the sprawling growth of public sector entities since the pandemic.
“There are good reasons for establishing entities to achieve a policy goal at a particular point in time, and they employ many talented and dedicated staff,” it stated.
“However, the large and growing number of public entities and their complexity are creating duplication and confusion, and stifling public- and private-sector productivity.”
The report found that the substantial direct and indirect cost to the government of maintaining more than 500 public entities and an extraordinary 3200 public boards and committees – a number greater than any other state or territory – undermined efforts to reduce public spending.
In response, the government will merge or abolish 29 public entities. Silver had recommended the consolidation of 78.
Victoria will also review its more than 90 advisory committees that run the full policy gamut from the Anti-Racism Taskforce, the Sheep and Goat Compensation Advisory Committee and the Victorian Strawberry Industry Development Committee.
Silver found the state’s complex bureaucracy is making it more difficult for citizens and businesses to engage with the government.
Symes said she accepted Silver’s analysis, and agreed having too many points of contact was a “handbrake on productivity”.
“Not only is it tying up some bureaucrats’ time, it’s creating numerous doors of entry for citizens, stakeholders and businesses,” she said. “Time is money. I hear this when I’m out there talking to the business community.”
The review was released alongside Symes’ response to its 52 recommendations. The government has accepted 27 in full, three in part, 15 in principle and rejected seven.
Many of the mergers or cancellations are subject to legislation which means they will need to pass the parliament where Labor typically needs crossbench and Greens votes to pass its bills.
In a sign of potential challenges for this agenda, the Allan government this week backed down on plans to include a merger of disability regulators as part of broader childcare reforms, removing the disability clauses after a backlash from the sector that means the Coalition, Greens and crossbench would not support it.
The government claims these measures, combined with reducing its use of consultants and office space freed up by public servants working from home, will save the budget more than $4 billion over the next four years, including $2.7 billion already accepted in the May budget.
The government will be implementing its program of cost-cutting in an election year, with the state opposition already making it clear budget repair will be a key plank of its attack platform.
If Silver’s 52 recommendations were implemented in full, her review estimated it would save $4.98 billion over the same period.
Sustainability Victoria, Cladding Safety Victoria, the Trade and Investment Board, the Latrobe Health Assembly, the Victorian Public Sector Commission Advisory Board, the Victorian Marine and Coastal Council and the Road Safety Camera Commissioner and Reference Group will all be wound up.
Some existing entities will be merged, with Recycling Victoria being folded into the Environment Protection Authority and multiple registration boards consolidated into a new Business and Processions Regulator.
Infrastructure Victoria will be “refocused” with a reduced budget after the government did not accept the review’s recommendation to abolish it.
The government rejected a recommendation to cease the rollout of government-funded early learning and childcare centres and shift them into the hands of private providers, a reform which would have booked savings of more than $350 million.
It also baulked at a recommended wholesale restructure of public utilities, which would have resulted in 14 water boards merging into three.
Silver called for the government to cease funding programs that provide musical instruments and doctors for high schools, and reduce the Better Boating Fund, but all of these requests were rejected.
However, it agreed to end a special paid leave program for health workers in place since the pandemic.
Targeted reviews and mergers of TAFE were recommended, but the government only committed to support this on a voluntary basis.
Symes said the measures adopted by the government would make the public sector more efficient while avoiding frontline job cuts.
She said the public service had too many executive positions and not enough graduate and entry-level roles.
Symes would not be drawn on how the savings would affect her operating surplus for this financial year. An updated figure for this will be reported on Friday as part of the state’s mid-year budget update.
Opposition Leader Jess Wilson said the Silver review was an admission of failure, accusing the government of mismanagement and a top-heavy bureaucracy that was driving debt.
“This report issues a stark warning over the dire impact Victoria’s soon-to-be $1 million an hour interest bill is having on our capacity to deliver frontline services now and into the future,” she said.
“These supposed savings are a drop in the ocean. Since this report was handed to Labor in June, Victoria’s net debt has grown by almost twice the claimed savings Labor’s cuts will deliver.
“The only ones cutting jobs and services are Premier Jacinta Allan and Treasurer Jaclyn Symes.”
Community and Public Sector Union state secretary Jiselle Hanna said it was good the treasurer had not embarked on bigger job cuts as first feared, but rejected the review’s suggestion the government should be smaller.
“Government already cannot do what Victorians expect it to,” she said.
“The blind-faith obsession with outsourcing costs the state more by reducing our capability, increasing long-term costs, and making budget repair harder.”
Victorian Chamber of Commerce chief executive Sally Curtain said the public and business community wanted to know tax dollars were spent wisely as the state head towards a net debt of $194 billion by the end of the decade.
“No one welcomes job losses, and we recognise the uncertainty today’s announcement will create for many public sector employees, but the pressures on the Victorian budget are significant,” she said.
The Silver review urged the government to stop funding areas that were the responsibility of the federal government, such as primary health care. Victoria will seek to do this but not if it involves frontline services.
Breakthrough Victoria, a private investment company established by the state government that was in the gun in March, will survive as a merged body that takes in all the government’s equity investment functions, including those of LaunchVic, and held by the Department of Treasury and Finance.
Because of complex legal arrangements around these funds, this could mean LaunchVic and Breakthrough Victoria are folded into the merged entity.
Kat Lucas-Healey, Environment Victoria’s senior climate and energy advisor, said the removal of Sustainability Victoria would reduce focus on programs to improve recycling behaviour, even as these roles were moved into the department.
“Folding Recycling Victoria into the EPA leaves the one agency regulating their own plans for controversial projects such as Waste to Energy facilities,” she said.
“Coupled with the loss of Sustainability Victoria … We have to wonder whether the government is serious about fixing our waste crisis.”
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