The Victorian government has unveiled a sweeping plan to shrink its public service, targeting more than 1,000 full-time jobs for elimination and merging dozens of state entities in a bid to rein in a ballooning wage bill and spiralling debt.
Major Cuts and Mergers Announced
Premier Jacinta Allan and Treasurer Jaclyn Symes released the government's response to an independent review on Thursday, committing to significant structural changes. The plan will see the public service workforce reduced by more than 1,000 full-time equivalent positions, including the axing of 332 senior executive and technical specialist roles.
In a major consolidation, 29 government entities will be either merged or abolished entirely. The shake-up also includes cuts to spending on external consultants, labour hire firms, and CBD office space. The Treasury estimates these combined measures will deliver savings exceeding $4 billion over the next four years to the state's pressured budget.
Review Findings and Government Response
The review, led by former bureaucrat and banking executive Helen Silver, contained even more aggressive recommendations. It suggested potential savings of over $5 billion through reductions of 2,068 jobs, 78 entities, and 90 advisory bodies. The government adopted a pared-back version of these proposals.
Premier Allan stated the moves would end unnecessary duplication and rebalance a public service she described as 'top-heavy'. 'We've rejected those recommendations that go to areas of frontline services,' she told reporters, aiming to shield core public delivery from the cuts.
The review highlighted a 16 per cent growth in Victoria's public service workforce since 2019, with a staggering 52 per cent increase in executive-level positions. In response, the government will cap higher-level staff (VPS5 and VPS6) at 15 per cent of the workforce, a move expected to save $125 million.
'We have a situation where we have too many executives, too many in the top of the range and not enough entry-level and graduate positions,' Treasurer Symes explained.
Political and Union Reaction
The announcement drew immediate political fire. Victorian Opposition Leader Jess Wilson labelled the review a '$4 billion admission of failure' by the Labor government, arguing the savings were a 'drop in the ocean' compared to the state's debt, which is projected to hit $194 billion by mid-2029.
The Community and Public Sector Union claimed a partial victory, noting the final job cut number was smaller than initially feared. The union's assistant secretary, Mitch Vandewerdt-Holman, pointed out that 619 of the 1,055 jobs slated to go have already been cut, and vowed to continue fighting to save positions.
Treasurer Symes addressed the timing of the announcement, just 20 days before Christmas, stating she was 'absolutely conscious' of its impact but insisted it was not a termination notice. She clarified that many positions would be removed through attrition, not immediate redundancies, which was factored into the $4 billion savings forecast.
The state's financial position, with interest repayments predicted to soar to nearly $29 million a day, is set to be a central battleground in the lead-up to the 2026 state election. The government's mid-year budget update, due for release on Friday, will provide refreshed projections on spending and debt.
