The Australian government has asked departments and agencies to find significant savings in next year's federal budget, with some public service budgets potentially facing cuts of up to 5%. Treasurer Jim Chalmers confirmed the move but denied it would lead to large-scale job losses.
Chalmers and Finance Minister Katy Gallagher acknowledged reports that cabinet ministers and agency heads have been instructed to identify budget reductions. However, the government has ruled out across-the-board cuts and will maintain the existing 1% annual efficiency dividend.
The announcement comes as new data shows the public service headcount grew by almost 50,000 employees, or 32%, to 198,529 between 2020 and 2025. The Australian Public Service Commission's snapshot revealed staffing increases in agencies including the National Disability Insurance Agency (35.1%), the Department of Agriculture, Fisheries and Forestry (19.1%), Services Australia (4.9%) and the Department of Defence (3.9%).
Chalmers said the government is seeking ways to reprioritise spending amid ongoing budget pressures, noting that $100bn in previous savings had been redirected to Medicare, bulk billing, urgent care clinics and income tax cuts. He left open the possibility of job reductions but indicated they would be smaller than those proposed by the opposition under Peter Dutton, who pledged to cut 41,000 positions over five years.
The Community and Public Sector Union (CPSU) warned against major cuts, with national secretary Melissa Donnelly urging the government to focus on reducing spending on private consulting firms and outsourced labour hire instead. Opposition leader Sussan Ley accused Labor of breaking its pre-election promise not to cut public service jobs, while Greens spokesperson Barbara Pocock called for cuts to consulting expenditure.
