Axe to swing on thousands of public service jobs, 29 government entities following Silver Review

As the Allan government pledges to save $1bn a year in a major overhaul of the public sector, the 29 government entities which will be abolished or merged have been revealed.

An estimated 1000 public service jobs will be axed and more than two dozen government entities abolished or merged in a public sector overhaul the Allan government says will save $1bn a year.

The pending job losses are expected to include 332 executive roles as well as a significant proportion of other senior positions, while 29 government entities and boards, including Sustainability Victoria, Cladding Safety Victoria, the Latrobe Health Assembly and the Road Safety Camera Commissioner and Reference Group will all be abolished.

Other key entities that will also be effectively wound up include VicHealth and Healthshare Victoria, which will be moved into the Department of Health, and Court Services Victoria which will be phased out.

The government on Thursday released in full the final report of its $2m review into the public service, almost six months after receiving it by former Department of Premier and Cabinet secretary Helen Silver.

In it Ms Silver was damning of the 16 per cent growth of the public service, and 52 per cent rise in executive roles, since 2019.

CLICK HERE FOR FULL LIST OF ENTITIES

“Even accounting for growth, there appears to be little basis for such a disproportionate increase,” she said.

“While the trend to greater executive numbers was already underway, the pandemic led to even more executive and specialist-level oversight in response to the urgency, increased complexity and volume of work.

“While there is no doubt the VPS (Victorian Public Service) is generally working hard, excessive hierarchy and layering create unnecessary distance between decision makers and advisors.

“It slows decisions, reduces agility, blurs accountability and inhibits learning.”

The report contained 52 recommendations Ms Silver said would realise $5bn in savings over four years, a reduction of more than 2000 public service jobs, and the closing of 78 of the state’s more than 500 public entities 20 of which had been created since 2020.

It also called for up to 90 of the state’s 3400 boards and committees to be axed.

“A smaller number of entities will enable clearer structures and oversight, and stronger accountability,” the report found.

“It will make government less complex for citizens and business to navigate and streamline departments with less time spent managing and overseeing multiple bodies and stakeholders.”

The Allan government will abolish or merge a string of government entities.

While accepting 27 recommendations in full, 18 in part or in principle and rejecting seven, the government’s response fell well short of achieving the savings identified by Ms Silver.

It included commitments to rebalance the public service with fewer senior executive positions, reduce the use of consultants and labour hire, and reduce the number of public sector entities by abolishing or merging them.

The government will also downsize its CBD footprint as more employees work from home.

Legislation to begin the mergers of entities will be introduced to parliament on Thursday.

When Treasurer Jaclyn Symes announced the review in February she said between 2000 and 3000 jobs would likely be slashed.

On Thursday Ms Symes said work to implement the recommendations accepted by the government would begin immediately.

“These targeted measures will improve the services Victorians rely on,” she said,

“Frontline workers are excluded from the scope of this review.

“Unlike the Liberals, we will never cut nurses, teachers, police officers or child protection workers.”

The cuts are expected to save $1bn a year. Picture: Supplied

As she fronted reporters, Ms Symes was forced to concede an error in a press release provided to media which claimed the government was saving $427m by abolishing 29 public entities.

Ms Silver had estimated the government would save $427m by scrapping 78 entities.

Ms Symes clarified that the true amount was just $27m, meaning the government had chosen to ignore $400m in potential savings.

She assured that the $27m figure was used in the total $4bn savings over four years, not $427m.

The recommendations that were rejected included scrapping a secondary school music program, cutting funding to the state’s boating fund and pausing the rollout of new early learning centres.

Ms Symes said she was “absolutely conscious” of the fact jobs were being chopped 20 days before Christmas but said this “isn’t a termination notification” for people.

“Today, many of these positions will be removed and altered and changed by attrition,” she said.

“That is what has been baked into the $4bn in savings.

“We would lose a lot of those savings if we were to pay out redundancies tomorrow.”

Ms Symes said the huge number of committees that had been set up was a “wake up call of not setting and forgetting”.

The government accepted 27 recommendations. Picture: Ian Currie

Premier Jacinta Allan said Victorian “families are watching every dollar they spend, and they expect the government to do the same”.

“We’re making sure our public service is laser-focused on Victorians – good schools, good healthcare, safe communities and real help with the cost of living,” she said.

Cutting health body slammed

VicHealth’s end as an independent body has been slammed by public health experts as a disastrous move that will “make more people sick” and ultimately cost the state money long-term.

VicHealth, the state’s independent health promotion agency, will have its functions moved to the Health Department under the upcoming changes to the public services.

The Silver review said the agency, which works to prevent chronic disease through research, policy development and community initiatives, did “important work” but this work could be “absorbed” into the health department, “without compromising service quality” or ending the brand.

But the Public Health Association of Australia, who has launched a “Save VicHealth” campaign, has warned that keeping the agency at arm’s length from the government is vital to its life - and cost - saving work.

PHAA chief executive Adjunct Professor Terry Slevin said investment in preventive healthcare saved money long-term - by keeping people out of hospital - but health departments were always under pressure to prioritise urgent care.

“That’s always going to get the immediate priority, because you’ve got sick people at the doorstep,” he said.

“The long term thinking that is required for preventive health has to be quarantined from that urgent requirement because the urgent always trumps the important.

“Inside the department, that immediate political pressure will always overtake and will ultimately shrink the investment in prevention and that’s our greatest anxiety.”

PHAA chief executive Adjunct Professor Terry Slevin. Picture: Supplied

He said the clear reduction in smoking rates and skin cancer rates after decades of investment in programs like SunSmart were evidence of VicHealth’s impact.

“If the funding does disappear into the chasm of the department, the ability to continue to support those kind of important programs will slowly eke away quietly in the background of bureaucracy.

“That’s why it’s essential that this is a special, separate and dedicated agency that’s protected from those kind of immediate pressures.”

International Union for Health Promotion and Education scientific affairs global vice president James Smith said it was “incomprehensible to think that this is a good decision”.

“Disinvestment in health promotion and prevention, we’ve seen other states and territories that have done that over the years,” he said.

“It’s taken them years and years to recover from those disinvestments.”

He said an independent agency could focus on truly “evidence based” work and take on the “harmful” industries that often “work with government” such as the alcohol, tobacco and gambling industries.

Just last year, VicHealth was part of a coalition — the Cancer Council-led Food Fight campaign — that criticised fast food advertising on public transport and called on the government to ban such material from the stations of their flagship project, the Metro Tunnel.

‘$4bn admission of failure’

Opposition Leader Jess Wilson said the review was a “$4bn admission of failure”.

“Labor’s mismanagement and top-heavy bureaucracy is driving Victoria deeper into debt and starving critical funds from the frontline community safety, health and housing services Victorians deserve,” she said.

“This report issues a stark warning over the dire impact Victoria’s soon to be $1m an hour interest bill is having on our capacity to deliver frontline services now and into the future.

“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.”

VCCI chief executive Sally Curtain.

‘Significant’ pressures on budget

Victorian Chamber of Commerce and Industry chief, Sally Curtain, said “a pragmatic alignment of functions and bureaucracy makes sense on face value.”

“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.

“These decisions highlight the importance of disciplined, long-term workforce planning to ensure the public sector is sustainable, accountable and doesn’t again drift beyond budget parameters. Victorians deserve confidence that savings are achieved sensibly and that essential services remain strong.”

CPSU claims victory

Victoria’s Community and Public Sector Union (CPSU) claimed victory as the government cut fewer jobs than the union had anticipated.

Mitch Vandewerdt-Holman from the CPSU even said that the government could have gone further and cut more executive jobs — of course using those cuts to resource other sections of the public sector.

“We recommended 450 executive jobs to go. Government has said 332. So we definitely think there is more room to cut,” he said.

“Since the silver review was announced, we’ve heard figures as high as 6000 jobs to go. The government’s response has accepted only 1000. It is a massive success on the union’s part to be able to save five in six jobs slated to go.”

Originally published as Axe to swing on thousands of public service jobs, 29 government entities following Silver Review