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Capital braces for 1500 job cuts

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The federal bureaucracy is poised to shed about 1500 staff in coming months, most from Canberra, as it struggles to cope with spending cuts.

However, more job losses are expected after next month's budget, in which the government will pare back its expenditure to try to deliver a surplus.

Public service sources warned last night of growing speculation that the ''efficiency dividend'' - an annual cut to agencies' administrative budgets - could rise as high as 5 per cent from July 1.

The government has previously said it intends to increase the dividend to a record 4 per cent in 2012-13 to save an extra $500 million.

Prime Minister Julia Gillard acknowledged yesterday the bureaucracy was bearing the brunt of some ''tough choices''.

''The Australian Public Service does wonderful things and should be valued,'' she said from Sydney.


''I am a big supporter of the public service but, as a government, we have had to make tough decisions to generate a budget surplus for 2012-13 … and how we are dealing with some matters in regards to public service employment is a result of those tough choices.''

Her comments followed the Regional Australia Department's decision to reduce its 650-strong workforce by 66 employees.

Earlier this week, the Climate Change Department revealed it would shed about a third of its staff.

Its secretary, Blair Comley, asked employees to consider applying for a redundancy, saying the department needed to reduce its workforce by up to 300 staff.

''We face a very tight budget situation over the next two years that will require conscious efforts to reduce the department's expenditure,'' he said.

''Even after examining our supplier expenses and identifying savings, any realistic review of our future budgetary environment requires a substantial reduction in our workforce from the current level of just over 900 … to closer to around 600-650 people by June 2013.''

The two workplaces join a growing list of agencies that have announced plans to let staff go, including the departments of Education (500 jobs), Treasury (150), Resources (100) and Veterans' Affairs (90), as well as the Bureau of Statistics (75), the Fairwork Ombudsman (70) and ComSuper (50).

The Health Department will also shed an unspecified number of jobs, while many smaller agencies have said they, too, will be forced to reduce their workforces.

Finance Minister Penny Wong has told agencies to try to avoid involuntary redundancies by instead spending less on travel, consultants and advertising.

However, Community and Public Sector Union national secretary Nadine Flood said the spending cuts would inevitably lead to thousands of job losses.

''The government needs to ask whether it really is essential to return the budget to surplus now, and whether they risk damaging the economy by making cuts that are too deep.''

The union was working with the government to ''ensure that there are no forced redundancies and that mechanisms to redeploy staff between agencies work effectively''.

But Ms Flood said Climate Change Department staff were shocked by the ''massive hit'' to their agency.

''A cut of this magnitude must damage the department's capacity to lead our efforts on climate change … Some of [its work] will simply no longer get done.''

Canberra's federal Labor parliamentarians were confident yesterday the bureaucracy would not suffer a net loss of staff, despite the crackdown on spending.

However, Ms Flood said all signs suggested they were wrong.

''At this point, it looks inevitable that this will result in a decrease in APS employment.'' Greens deputy leader Christine Milne also criticised the job losses in the Climate Change Department, saying the government should cut wasteful subsidies to mining companies.