Warwick McKibbin, from the ANU's Crawford School of Public Policy, says a review of the public service would evaluate whether departments and agencies are capable of delivering future policies.

He is opposed to a ''slash and burn'' approach to the public service but is calling for a fundamental rethink on policy, which would result in likely changes to the bureaucracy.

''It would require a degree of leadership that we haven't seen for a decade or more [but] you don't just sack everybody and start again,'' he told Fairfax Media.

''I think we're at a point where we do need to have a serious look at our fiscal situation and where we need to have some fairly big policy decisions made for this country generally.

''It seems to me that is a good point to make sure we can deliver on what is required over coming decades. We have a lot of programs and a lot of bureaucracy has been built up over the years.

''We have to do something about the fiscal position - one way to do it is just to slash and burn and I think that is completely the wrong way to go about it.''

Professor McKibbin said the government should decide what policies the nation needs and then what agencies and departments are needed to deliver them.

''We would want to evaluate the performance of some agencies because there's a lot of argument out in the popular media about Treasury and other departments,'' he said. ''It's dangerous to tamper with institutions if they're not broken but you need to review them and you need to make sure they're performing they role they are supposed to perform.''

While the Coalition suggests it no longer trusts Treasury figures, Professor McKibbin says it is unfair and dangerous to criticise the department's work.

''I think it is dangerous to look at existing heads and assume there is a political bias in the way they are acting and therefore eliminate them and put other people in their place, because the constraints the secretaries are working under are real,'' he said.

''We've seen the damage that's been done by undermining the Productivity Commission.

''I worked closely with Treasury and I think there are a lot of good people there who do a good job.

''You still need to evaluate Treasury and finance, there has to be some form of transparency. Even though Treasury has this sort of aura of invincibility, you need to have external expertise interfacing with Treasury and finance.''

Professor McKibbin does not agree with Labor's policy on the public service to increase the so-called efficiency dividend, or the Coalition's promise to cut 12,000 positions by natural attrition.

''I don't like either in the sense that it's got to be done in a cost-benefit way,'' he said. ''Get rid of the positions that are least productive, that give us the least return to the taxpayer, not the next people to retire. If you are serious about this you want to have some transparent process for getting the best return to taxpayers and delivering the best quality of policies.

''An efficiency dividend may achieve that but there's no reason it should because it's done across the board, across all departments - why are they all judged equally?

''I don't think it is that there are too many people in the public service per se; we have to do something about improving our fiscal position.''