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Coalition’s Public Service Reduction Target Faces Hurdles
An analysis by Guardian Australia reveals that the Coalition’s objective to decrease government positions by 41,000 over the next five years could encounter difficulties without affecting roles within departments they have vowed to safeguard. This ambitious plan to downsize the public sector raises questions about potential impacts across various government agencies.
Revised Approach to Public Sector Job Cuts
Peter Dutton has adjusted his initial commitment to immediately eliminate 41,000 public service jobs upon election. He now proposes to achieve this reduction through “natural attrition” over a five-year period. This revised strategy is presented as a measure to curtail “wasteful spending” within the government sector.
Under this updated plan, redundancies will be avoided. Instead, a recruitment freeze will be implemented to prevent the public service from expanding to a projected 213,439 positions by 2025-26, as outlined in recent budget documents.
The opposition leader has stated that cuts will not target frontline staff or essential agencies, particularly those crucial for national security. However, he has not clarified which specific roles, among the tens of thousands slated for reduction, will not be filled once they become vacant. This lack of specificity leaves uncertainty regarding the future structure of the public service.
Public Service Departures in 2024
Data from the Australian Public Service Commission (APSC) indicates that 11,782 employees departed the federal bureaucracy in 2024. Significantly, 57% of these separations, totaling 6,665 positions, originated from key departments, including Home Affairs, Defence, the Australian Taxation Office, and Services Australia.
These four major agencies collectively represent approximately 48% of the entire public service workforce, according to APSC statistics.
While an average of 11,000 public service employees leave annually, a significant portion of these departures typically occur in frontline or essential roles. This trend suggests that the Coalition might face challenges in meeting its reduction target without impacting essential services, potentially forcing them to either replace departing staff or reconsider their pledge.
Impact on Key Agencies
Services Australia
Services Australia, a major agency operating call centers that provide public assistance with income support payments, employed over 35,000 individuals in 2024. Service delivery roles constituted 66% of its workforce.
Approximately 4,500 Services Australia staff are based in Canberra, with the remaining 30,000 located in other parts of the country.
This critical agency experienced a loss of 3,577 employees in 2024, accounting for roughly 30% of all public service separations during that year.
Department of Defence
In the Department of Defence, around 1,384 staff members left their positions last year. APSC figures show the department employs 20,048 individuals, with over half in accounting, administrative, and project management roles. Notably, the Defence department does not include service delivery roles within its structure.
Department of Home Affairs
A similar situation is observed in the Department of Home Affairs, which includes the Australian Border Force. This department, with a workforce of 15,000, saw approximately 700 staff departures last year (6%) and nearly 900 in 2023.
Service delivery roles comprise about 16% of its workforce, while over half are engaged in administration, compliance, and program and project management activities.
Australian Taxation Office (ATO)
The ATO is another significant public service employer, with approximately 21,000 staff nationwide, with only 8% based in Canberra.
In 2024, over 1,000 employees left their positions at the tax office, with more than half holding junior, non-managerial roles.
Across the entire public service, about 72% of those who departed last year were in junior positions at the APS 3 to APS 6 levels, with salary ranges between $76,000 and $120,000.
Historical Context and Costing
The opposition’s spokesperson for public service matters, Jane Hume, stated that a Coalition government would conduct a comprehensive audit of the public service workforce and implement judicious changes if elected.
Dutton affirmed that the policy’s financial implications would be made public. In February, he indicated that “advice” concerning his previous pledge to dismiss 36,000 public servants suggested budget savings of $6 billion annually and $24 billion over four years.
In his budget reply in March, this projected saving was revised upwards to $7 billion “once in place,” projecting $10 billion over the subsequent four years.
The concept of reducing the size of the federal bureaucracy is not a novel approach for the Coalition. Former Prime Minister Tony Abbott also pledged similar measures before his election in 2013.
During Abbott’s two-year tenure as prime minister, the Coalition’s attrition policy, combined with a hiring freeze, resulted in an average reduction of nearly 11,600 public service positions.
In the 2015-16 budget, the Coalition government imposed a ceiling on public service employee numbers, aiming to maintain the workforce at or below 167,596, which was comparable to 2006-07 staffing levels. This cap was later removed when Labor assumed power in 2022.
Consultant Usage Under Previous Government
In May 2023, the Albanese government released an audit examining the Morrison government’s final year. The audit revealed that 54,000 full-time equivalent staff were engaged as consultants or service providers during the 2021-22 financial year. This figure represented 37% of the 144,300-employee public service.
Furthermore, the audit found that outsourced service providers accounted for nearly 70% of the total $20.8 billion expenditure on external labor. Over a quarter of this spending was allocated to contractors and consultants.
The public service minister, Katy Gallagher, criticized the Morrison government for establishing a “shadow workforce” by imposing an “arbitrary cap on the number of government employees” under the guise of efficiency.