The federal bureaucracy will shed more than 4200 full-time jobs next financial year, its first significant contraction since John Howard wielded the axe in the late 1990s.
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Yet Fairfax modelling, based on Treasury’s wage-spending forecasts, suggests the austerity drive will continue for at least three years, resulting in total losses of more than 12,000 employees by the end of 2014-15.
Finance Minister Penny Wong has spared few government agencies, with most portfolios expected to reduce their staff.
She also confirmed the government would cap the number of senior executives it employs — presently about 2750 officers — for the next five years, ‘‘effectively halting what has historically been a rapid growth in numbers’’.
Despite the steep spending cuts, Senator Wong said there would be few sackings.
‘‘Overwhelmingly, these job losses are a result of natural attrition and voluntary redundancies. Decisions that result in staff reductions are not made lightly and the Gillard government recognises the importance of ensuring the public service remains strong.’’
She also said the Australian Public Service’s staff levels would fall by ‘‘about 3000 jobs’’ next financial year.
However, the total staff losses blow out to 4227 when the forecast increase in defence personnel and military reservists is excluded.
The budget papers also project many more losses to come in 2013-14, when the government plans to cut its wages bill by $164 million.
Assuming that public servants’ salaries rise by 3 per cent a year, in line with government policy, the wage cut equates to an extra 5400 full-time job losses.
Community and Public Sector Union national secretary Nadine Flood said the "enormous cut" would damage essential public services.
"The government needs to be honest and acknowledge that these cuts mean it will provide fewer services. These are real people doing real jobs, serving every community around Australia."
She said the union would now focus on protecting jobs by pushing agencies to find savings from other areas of spending, and on ensuring that they respected staff's industrial rights.
Fears that the Defence Department’s large civilian workforce would be gutted proved unfounded, with the organisation poised to shed only 624 of its 22,355 full-time-equivalent jobs.
The Climate Change Department announced last month it would lose more than one in three of its 950 workers, yet many are likely to be rehired by carbon industry authorities, which will recruit an extra 305 staff.
Two of the fastest-growing agencies in recent years — the government’s overseas aid organisation, AusAID, and domestic spy agency ASIO — have been forced to rein in their rapid expansion.
AusAID’s 1850-strong workforce will add just 38 staff in 2012-13, while the government has told ASIO, which has tripled in size since the September 11 attacks, to halt any further growth. The government said it would save $20 million a year for the next four years by ‘‘reprioritising’’ its intelligence work.
The Australian Taxation Office will suffer the largest single cut, shedding 1039 of its 21,991 full-time staff next financial year.
Most central policy agencies, such as Treasury and the Department of the Prime Minister and Cabinet, will also shed staff.
These workplaces grew in size and power under Kevin Rudd, but the Gillard government has slowly farmed their work back out to service-focused departments.
Most government agencies have been planning for the coming lean period since November last year, when Senator Wong announced she would increase the so-called ‘‘efficiency dividend’’ — an annual cut to agencies’ administrative budgets — from 1.5 per cent to a record 4 per cent.
