Finance Minister Senator Penny Wong.

Finance Minister Senator Penny Wong addressing the National Press Club this month. Photo: Alex Ellinghausen

The federal Education Department and the Treasury will shed hundreds of jobs in the coming year to try to cope with government budget cuts.

The two departments told staff yesterday they must reduce their workforces after Treasurer Wayne Swan decided to cut administrative spending by an extra $500 million in 2012-13.

The Department of Education, Employment and Workplace Relations, which employs about 4300 public servants, will shed 500 jobs, while the Treasury aims to cut its 1300-strong workforce by 150 staff.

CPSU National Secretary Nadine Flood pictured at Parliament House in 2010.

CPSU National Secretary Nadine Flood pictured at Parliament House in 2010. Photo: Mark Graham

Almost all the departments' employees work in Canberra.

The two workplaces now join the Health Department and the Australia Bureau of Statistics, which have already announced they will retrench staff to deal with the government's economy drive.

Community and Public Sector Union national secretary Nadine Flood said the deep cuts announced in the mid-year budget review meant job losses were inevitable.

''This is bad news for DEEWR employees, but it's also a concern for the many businesses and organisations that rely on the important work these people do. For a government so focused on employment, cutting 500 jobs from your own employment department is not a great look.''

She said the bureaucracy would lose talented staff with skills ''built up over many years''.

''It will take a generation to recover. It is a false economy.''

The Education Department said it would offer voluntary redundancies, as staff attrition alone was unlikely to lead to 500 job losses in a year. Its secretary, Lisa Paul, said: ''While we anticipate that essentially all areas of the department will be impacted by the reduced budget, those impacts will … help inform how many VRs we offer and where … While we will continue to look for savings in areas such as travel and property, we will need to reduce staff.''

The government's budget review, issued in late November, revealed Labor would raise the ''efficiency dividend'' from 1.5 per cent to a record 4 per cent in 2012-13.

Finance Minister Penny Wong said much of the money could be saved without sacking staff, by reducing spending on consultants, advertising and travel.

The Treasury could not be contacted last night about its plans to reduce its workforce.

How is your workplace coping with the government’s budget cuts? Send your confidential tips to aps6@canberratimes.com.au