‘Top-heavy’ public service to take $4 billion haircut

More than 1,000 public servants will be cut as a state tries to rein in its ballooning wage bill and debt.

Premier Jacinta Allan and Treasurer Jaclyn Symes on Thursday released a long-awaited independent review of Victoria’s public service, led by banking executive Helen Silver.

The Victorian government has agreed to cut more than $4 billion – less than $5 billion in recommended savings – with total staff numbers expected to fall to more than 1,000 full-time equivalent workers.

The measures include reducing 332 managers and similar roles, cutting spending on consultants and hiring workers, reducing CBD office costs and merging or liquidating organizations.

Frontline roles such as teachers, nurses, police and child protection workers were not covered by the review.

It found Victoria’s public service workforce has increased by 16 per cent since 2019, with manager roles increasing by 52 per cent.

The moves will end unnecessary duplication and rebalance the state’s “heaviest” public service.

“Families watch every dollar they spend and expect the government to do the same,” Ms Allan said.

“That’s why we need to reduce waste and inefficiencies so we can invest in the things that matter to Victorians.”

When announcing the review in February, Ms Symes said it was targeting job losses of between 2000 and 3000 – around five to six per cent of the civil service workforce.

The Victorian government will introduce legislation on Thursday to implement the review’s recommendations.

27 were accepted fully, 3 partially and 15 in principle.

Seven were not accepted, including ending certain school programs and abolishing government agencies such as the Geelong Authority.

Victoria’s more than 500 public bodies and 3,400 boards and committees are costly and “cumbersome”, the review said.

Ms Silver called for the number of organizations to be reduced by 78 and the suspension of up to 90 advisory bodies.

The government’s response fell short of the target, committing to cutting only 29 public bodies and boards.

Ms Symes’ predecessor Tim Pallas sought to cut 3000 to 4000 public service jobs in the 2023/24 Victorian budget.

Instead, headcount rose from 54,760 to 54,839 in the financial year, with the total wage bill forecast to rise from $38bn in 2024/25 and $42.4bn in 2028/29.

Victoria’s net debt is forecast to reach $194 billion by mid-2029, with interest repayments approaching $29 million a day.