19 December 2024

Coalition now says it will slash as much as $30 billion from the public service

| Chris Johnson
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Entry to Services Australia building

Labor says the Coalition’s target of the public service will severely impact how services are delivered to Australians. Photo: Michelle Kroll.

The Mid-Year Economic and Fiscal Outlook will be revealed today (18 December), and Treasurer Jim Chalmers is set to use MYEFO to reveal a $100 billion downgrade in mining exports over four years, which will result in $8.5 billion less company tax the government can grab over that period.

It’s a sharp reality check that doesn’t bode well for future surpluses and government spending.

Meanwhile, when Shadow Assistant Minister for Housing Andrew Bragg was asked during an interview on Sky what the opposition would do if it had control of the federal budget, his answer was swift and to the point.

It’s the public service.

“We’ve seen some significant deterioration in the national finances, and we will see further years of deficits. They will be very deep deficits,” he said.

“And I think that’s because the government prioritised the public sector over growing the private economy.

“And now the public sector is having to meet, for example, a very significant wages bill which has exploded under this government.”

READ ALSO Incoming government briefs already underway as year ends

As the Liberal senator continued his explanation of how the Coalition will save money, he suggested that the cuts to the public service might go further than the 36,000 jobs Peter Dutton has already flagged.

When asked to give examples of where the savings would come from, he answered that up to $30 billion could be taken from the public service—a higher number than the opposition has previously suggested.

“Well, there’s $20 or $30 billion dollars of excess public sector expenditure now that exists because of this government’s judgment to expand the size of the public sector,” he said.

“So, we wouldn’t be proceeding with that.”

When the interviewer interrupted to clarify that Senator Bragg was actually saying there would be a $30 billion cut to the public sector, the assistant shadow minister not only confirmed the figure but made specific references to just where in the Australian Public Service such savings could be found.

“There’s a very significant growth that’s occurred, $20 or $30 billion, over the course of this parliament into the size of the public sector,” Senator Bragg said.

“There’s also, in addition to that, very significant growth in the number of bureaucracies.

“There have been boondoggle funds, like the national reconstruction fund, the housing fund – I mean these are not things that we would proceed with.”

Labor has seized on the comments as the clearest indication yet that the Opposition Leader intends to reduce the size of the APS and its ability to deliver services for Australians.

Public Service Minister Katy Gallagher suggested that Senator Bragg’s language would have sent a shiver down the spine of thousands of public servants in Canberra and other cities and regions across the nation.

She said the Coalition spent a decade deliberately dismantling the APS when it was last in government, and it is clear as day that they plan to do that again if elected.

“Peter Dutton’s reckless plan to slash up to $30 billion from the public service will see jobs slashed and essential services Australians rely on every day go backwards,” Senator Gallagher said.

“Cuts of this magnitude will impact the government’s ability to deliver critical services that Australians use every day and will cause delays in Services Australia payments, veterans’ claims, and see a blow-out in processing times for Medicare.

“Australians deserve a government that is focused on delivering services to the community, not one that outsources government work or sacrifices essential services for ideological political point scoring.”

Senator Bragg’s comments are the latest in a concerted Coalition effort to target the public service.

Since May when Mr Dutton used his budget in reply to label funding for an extra 36,000 public sector jobs over four years (to be located mostly outside of Canberra) as a misplaced priority, he and his frontbench have used every opportunity to talk down the public service.

Shadow ministers have been on the attack, making no secret of their plan to cut public service numbers and services.

“You’ve got to ask yourself, do we need 36,000 more public servants?” Mr Dutton told a recent Minerals Council dinner.

Nationals leader David Littleproud has also been on message.

“The first thing we’ll do is sack those 36,000 public servants in Canberra – that’s $24 billion worth,” he said in a media interview.

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The cold hard reality is that there are far too many public servants in the APS in Canberra agencies. The place is chock full of passengers when you get down to the Section level. Sure there are slack SES staff and just way too many of them too. That also needs heavy trimming. But what we see in work teams in Sections is a high percentage of staff doing very little useful work. Only a handful of team members do the work (or are capable of doing it). There is a lot of time spent on endless meetings with the pretence of work, and reading/creation of far too many emails. There is a lot of staring into PCs. Correct usage of pronouns and PC behaviour is emphasised.

In the APS, senior management know that flextime (up to the APS 6 level) is routinely rorted. In addition, underperformance is rarely dealt with by managers. Managers largely do not manage their teams well. The plain fact is work is largely undertaken by EL1s and the Head of the unit. We now have useless referees reports by managers on their staff who have applied for a job. These reports tend to avoid telling the truth about performance and talk up staff. That is mainly because weak managers (the vast majority) avoid conflict (and they want to be liked). In the new APS, staff roll in at various times. Quite a few seem to go for coffees regularly and never seem to have short lunches. Certainly it was the case a few years ago, you’d see smokers on many occasions trudge out of the office for a smoke often taking others with them. Back then, you were a mug if you hired a smoker. Perhaps it has changed.

What one becomes aware of is there is an incredible sense of entitlement amongst so many public servants living and working in the Canberra bubble. Those in the private sector in Canberra will tell you how arrogant so many are when buying their lunch and interacting with the community. Public servants represent Dilas’ New Class. The political reality is only the Coalition will cut back on this largesse. Labor won’t and will once again call VRs sackings. We can expect many Letters to the Editor in the Canberra Times fulminating about the nasty Coalition. The pantomime will continue.

Although, to be fair, the meaningful relationship building and hence the best work was usually done at the smokers’ corner.

I’ve been through a couple of purges as the one proposed by Dutton. This time around, if offered, I’ll put my hand up for a VR. 2 weeks for every year of service, plus LSL isn’t something to scoff. It would knock off my mortgage and trigger early payment of my PSS super which is enough to live on.

After the 1996 Coalition win by Howard et al, quite a number of lefties said they wouldn’t work with the new government. Many waited and then lined up and took generous VR packages. These packages were described by Labor pollies – incorrectly of course – as sackings. There was a stampede to get out with the generous payouts. People were upset if they were not offered a package. However, many found their APS skills (cheating on flex; extensive sick leave; laziness; disappearing during working hours) didn’t translate too well into private sector jobs. Many were desperate to get back after a few years to a comfy sinecure. Many got back but at more junior levels. Much to the chagrine of the trade union movement, we saw real wage increases in the Howard years and generous AWAs were offered (to Executive level staff – SOGB/C). SES wages/conditions boomed. Again, I know many lefties who quietly negotiated an AWA in the APS but bad mouthed them to their friends. We can expect the same pantomime to unfold.

Steph Fernance12:24 am 20 Dec 24

Sure there are jobs that can be cut but a broad statement like that is dangerous. The public service must be properly equipped to support the Australian public to the level expected. There are areas within that are short of staff and require further investment as I am sure there are areas that could be reduced. Hopefully we get some politicians that actually give a crap about the Australian people and have the strength to make change for the good not simply changes that do damage to us because they are spreading misinformation and causing discontent because they believe it will benefit them

To further complicate the conversations, it is not just a matter of having staff – but having the staff with the right skills, experience and attitude.

Finance 6'5" Blue Eyes10:49 am 19 Dec 24

Unbelievable, they’re literally just moving $24b of operational funding into potentially $100b of capital funding to hire the contractors that will do the work in lieu of the staffers.
I pray that voters see through this, and realise that this will:
– reduce productivity
– reduce the quality of service the government provides
– massively increase tax payer cost

This is not a way to save Australia money; this is trying to score political points from the nieve.

MacAccountant3:27 pm 19 Dec 24

I agree they are just moving the dollars around but that is not how capital funding works. Capital funding is for capital expenses, buildings, assets etc. They need a huge cut of public servants and contractors especially in the big departments.

Heywood Smith10:09 am 19 Dec 24

Its quite laughable to read comments from others who assume that a reduction in APS numbers means a cost saving to the Govt. For those who are not familiar with how it works, contractors and/or consultants are not counted towards a departments approved staffing level. For example, if an agency has 2 full time staff, and 40 contractors, if asked at Senate Estimates how many FTE/ASL the agency has, the answer is 2! This obviously doesn’t correctly reflect that it has 42 employees. Finally, the oncosts for a FT APS entry level EL1 including leave and super etc would be circa $160k per year. A labour hire employee doing the same work in the current market can earn up to $100/h (or more!) plus loading, so it would cost twice as much to the tax payer! Dont think for one second if the Coalition reduce APS numbers that 1. they wont be replaced by labour hire and 2. it wont cost the tax payer twice as much.

Any public servant knows that there is a lot of money wasted. It should be run as a tight ship but it isn’t.

Heywood Smith9:48 am 19 Dec 24

More money wasted on those who refuse to look for employment and collect welfare week to week. People are quick to bash the APS, yet are happy to bleed hundreds of billions for the likes of dole bludgers etc,

There are very few ‘dole bludgers’. There are a lot of people who can’t get jobs because employers want tall short men, people that can’t be found and are rejecting high potential people because they don’t know how to identify them. They reject people for reasons that are irrelevant to success in the workplace or fit to the job due to personal biases, conscious and unconscious. Then they complain that they can’t find the skills they want. They just don’t know how to recruit effectively.

The problem is worse in the public service than anywhere else I’ve seen in the commercial world. The public service has virtually no skills in job analysis, candidate assessment and selection, let alone training and management. Recruitment and HR in most agencies is totally without scientific training and so fails miserably.

That is not the fault of people who are not getting a chance at a job. It is about unskilled recruiters, unskilled managers etc.

Well said Blow In. Whilst there’s lots of really good work done in the public service, there is also an immense amount of waste, more in some departments (eg Defence) than others and much of it due to incompetence. There is way too much hiding of problems instead of fixing them so more and more waste occurs gradually overriding much of the good work.

William Teach12:31 am 21 Dec 24

The biggest outright waste, excluding bad major policy decisions (where you can argue that they’re delivering an objective even if it’s one we disagree with), is the insane pound-foolish penny-pinching and the insistence on outsourcing everything even where the only client for a work group is the government, and then refusing to pay SMEs enough to validate the work that the OSPs are doing so they end up marking their own homework.

The UK is just starting to realise that their civil service reforms of the Thatcher and Blair eras were a moronic idea, so maybe in 20 years Australia will catch on and start undoing the cumulative damage caused by every government since at least Hawke’s (including the present one, despite Gallagher’s promises before the election).

HiddenDragon9:00 pm 18 Dec 24

In the absence (at least publicly) of a local version of the Project 2025 document, the best clues about what the Coalition might have in mind for public spending, including on staffing, probably still come from the 2014 report of the National Commission of Audit established in the early days of the Abbott government.

For various reasons, most notably the memorable election eve promise about all the items which would not be cut, Abbott did not get very far with that report.

Dutton, thus far, has not made the same mistake – so if enough voters can be convinced that cutting public spending will get inflation and interest rates down further and faster, the only practical limit will be what can be got through the Senate and what crucial Coalition stakeholders will tolerate.

Only if it’s going to reduce the cost of living and taxes.

Yes that’s the LNP way, slash the APS employee numbers, then realise that they don’t have enough people to even the basics, then hirer a heap of contractors from their mates at 3-4 times the cost of in house employees.
I remember when Howard outsourced all IT work for the APS, then a few years later, brought it back in house because, the cost was blowing out practically every departments budget. But, this along with his gutting of the APS in Canberra (which a lot of us remember), so much corporate knowledge was lost.

It was Labors Rudd who last slashed the APS. Both sides do it for political reason. The subsequent hiring of contractors to cover these lost positions resulted in Labors Albanese deciding to reduce contractors numbers by bringing them back in-house which has led to the increase of APS staff that Dutton wants to axe which will result in more contractors being employed and so the wheel turns around.

@ Elf – Agreed, but no-one did it on the scale that Howard did. Canberra emptied, the local economy shrank hugely, house prices dropped dramatically and there were lots of empty properties going for very cheap prices. Good for those who wanted to buy in, as long as they had a job in the private sector but even those jobs shrank, especially consulting ones.

Baron Geddon1:05 pm 18 Dec 24

What’s the bill for staffers for these lads at, just for comparison? 🤔

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