Efficiency, not cuts, needed for bureaucracy, ex-APSC head Andrew Podger says

The federal bureaucracy is ‘too top heavy’ and some of its employees are overpaid, the former head of the nation’s public service watchdog Andrew Podger has said.

Public Service Minister Katy Gallagher has defended the surge in the public service headcount. Picture: NewsWire / Martin Ollman

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The federal bureaucracy is “too top-heavy” and some of its employees are overpaid, the former head of the nation’s public service watchdog has warned, as Labor backs its ballooning growth and says it is creating good, permanent jobs.

The major parties have announced starkly different agendas for the future of the commonwealth’s approximately 209,000 bureaucrats ahead of the impending election, with Public Service Minister Katy Gallagher on Monday defending Labor’s increase of 36,000 full-time equivalent employees since 2022.

“I think the public service is roughly the right size now,” Senator Gallagher told ABC radio. “There is absolutely no evidence to say that it’s grown out of pace with the work that it needs to do,” she added, saying the public service, as a proportion of the population, was akin to 2006 levels.

Peter Dutton has vowed to slash the size of the federal bureaucracy to levels recorded prior to when Labor won government in May 2022, yet he has provided scant details of how he would achieve such a reduction without impacting frontline ser­vices, which he has vowed to retain.

Andrew Podger, who led the Australian Public Service Commission for several years during the Howard government years and is now an honorary professor of public policy at the Australian National University, said while the number of bureaucrats was “probably about right”, “inefficiencies” remained in the public service that should be addressed.

“The number of deputy secretaries is way more than it needs to be, probably at least double the number we need,” Professor Podger said. “The senior executive service could be shaved by 25 per cent without affecting anything to do with service delivery.”

Some federal bureaucrats were “paid too much”, the former APSC head added, but noted that higher salaries were required to attract some employees from the private sector.

Labor has defended the growth of the public sector on the grounds it has reduced more expensive consultant costs, with Senator Gallagher identifying an extra $720m in savings in Tuesday’s federal budget because of reduced spending on contractors and on labour hire.

Stephen Bartos, a former deputy secretary at the Finance Department turned University of Canberra academic, suggested consultants could be less expensive than expanding the bureau­cracy in some cases.

“Consultants, for some purposes, can be cheaper if you employ them for a brief period, because the advantage of hiring a consultant or a contractor is that when the contract is over, they go away again,” Professor Bartos said.

“Hiring a public servant means that they’re on the books indefinitely.”

Asked about the Coalition’s plan to dramatically slash the public service headcount, both Professor Podger and Professor Bartos agreed the policy would be achievable but would likely result in less savings than the $6bn figure that has been touted by the Opposition.

“Even if you were to get the 36,000 (person) reduction … [the Opposition Leader is] going to do it at probably quite a significant cost to service delivery,” Professor Podger said.

“It would mean having to hire more consultants and contractors to do the work,” Professor Bartos added.

“It’s just a substitution.”

Mr Dutton has additionally announced plans to order public servants to return to the office five days a week, but has since pared back that policy to demand attendance instead return to pre-pandemic levels.