JavaScript disabled. Please enable JavaScript to use My News, My Clippings, My Comments and user settings.

If you have trouble accessing our login form below, you can go to our login page.

If you have trouble accessing our login form below, you can go to our login page.

Federal budget puts Canberra on the razor’s edge with 16,500 public service jobs cut

Big cuts: Treasurer Joe Hockey and Prime Minister Tony Abbott arrive to hand down the budget in the House of Representatives.

Big cuts: Treasurer Joe Hockey and Prime Minister Tony Abbott arrive to hand down the budget in the House of Representatives. Photo: Alex Ellinghausen

The Abbott government's first budget will hit the federal bureaucracy with its biggest staff cut since the 1990s. 

A projected 16,500 public servants will be cut nationally in the next three years – a massive 7336 full-time-equivalent civilian government workers in the first year alone – in a budget that leaves Canberra with no financial surprises to inject activity into the ACT economy.

Illustration: David Pope

Illustration: David Pope

The three years of cuts would translate to 6500 in the ACT if the reductions were proportional across the public service.

The budget aims to reduce the existing deficit from $49.9 billion to $29.8 billion by next year and then $2.8 billion by 2017-18.

The blunt instrument known as the efficiency dividend will almost double overnight from 1.25 per cent to 2.5 per cent – 0.25 per cent of this increase comes from the Coalition and the rest of the hike is a hangover from Labor – and remain in place for three years.  

Treasurer Joe Hockey struck at Canberra more than anywhere else when he pushed his government’s agenda for smaller government by saying he wanted fewer public servants "interfering" in people's lives.

"We have been at pains to reduce government expenditure without hurting the economy," Mr Hockey said.

A "smaller, less interfering government won’t need as many public servants" and the 16,500 staff cuts would not compromise public services, he said. 

He touted a budget that pledged to reduce Australia's debt from $667 billion to $389 billion in 10 years, helped in some way by slashing the foreign aid budget to save $7.9 billion over five years.

Community and Public Sector Union national secretary Nadine Flood said Mr Hockey's headline job loss figure was not counting the "massive wave of privatisation it is about to unleash". 

Ms Flood said 16,500 was triple the jobs lost under Labor and it was a joke for the government to blame its predecessor. 

"I think our [original] 25,000 figure might look conservative in a few years," she said.

Canberra's slim rewards include $26.8 million for relocation and fit-out of the Department of Social Services, which will stay in Tuggeranong – an announcement that will allay fears the large department would move out of the struggling town centre. 

Apart from this and $60 million across four years for the Department of Parliamentary Services, there is little good news.

Some ACT pastoral leases are set to be sold as the Commonwealth reduces non-defence land holdings worth $22.5 million nationwide. 

The Australian National University will lose $6.4 million as the Commonwealth axes funding for the HC Coombs Policy Forum. 

There will be a scoping study on government ownership of assets such as defence housing, the ASIC registry and the Royal Australian Mint in Deakin.

The public service jobs cuts figure of 16,500 is 4500 more than the Abbott government pledged in the lead up to the election and is 2000 on top of the 14,500 the Coalition says Labor was going to cut.

The Australian Taxation Office, which lost 900 people in 2013-14, will be the hardest hit by staff reductions, which will reach 2329 by June 2018.

The ATO loses 2100 jobs in the coming financial year, with the budget bringing some reductions forward, and another 1700 in the following years.

Civilian staff numbers at Defence will be reduced by 1200 and another 300 "service providers" will go by 2017-18 to save $606 million within four years – a much softer approach than what was recommended in the Commission of Audit.

The Bureau of Meteorology receives its own special efficiency dividend, to recover $10 million over four years. 

The budget contained no figure for public servant job losses in Canberra, which is home to 39 per cent of the bureaucracy, meaning there would 6500 job cuts if the reductions were proportional. But this will likely be exceeded because redundancies are being targeted at managers, most of whom are located in Canberra.

In line with information put out by the government earlier this week, the government will abolish more than 230 bureaucratic programs and 70 government bodies.

The increased efficiency across the forward projections will save another $590 million and there is no clear answer as to where the dividend affects job losses in the bureaucracy.

- with Markus Mannheim

66 comments

  • There are more than enough casualties of this ideologically-driven Budget, but health is my areas so:... I am hoping that good sense will prevail when it comes to recognising the valuable work that the Australian Institute of Health & Welfare has performed for the past 30 years. Good-quality data and expert analysis are crucial to primary care and public health. We need more of these, not less. The $7 charge to see a GP will be a further disincentive for people who need to see a doctor to avoid doing so, resulting in higher health costs down the track. Also, in terms of preventive health, while the ANPHA did not exactly cover itself in glory, prevention always struggled to find a strong and coherent profile within the federal Dept. of Health, which is why it was hived off in the 1st place. Dutton needs to look at a number of good models for disease prevention, including those from countries with conservative govts. Finally, very disappointed to see no mention of improving the PBS, which the Grattan Institute's 2013 report found could save more than $1 billion by improving purchasing arrangements and benchmarking the prices the PBS pays against those paid in comparable countries such as NZ.

    Commenter
    Karina
    Location
    Belconnen
    Date and time
    May 13, 2014, 11:59PM
    • Karina,

      You just don't get it do you. Thanks to Labor the country is worse than broke.

      Nowhere near enough public servants have been given their marching orders. Will anyone miss them. Probably not.

      The whole of CASA should be closed down. It's a duplicate organisation & much cheaper if you use NZ CAA.

      Commenter
      ian
      Date and time
      May 14, 2014, 8:15AM
    • @Ian
      Gee you gotta be kidding right? Labor made us broke? you need to check the facts on exactly where Aust is in respect to Debt per person in the world - you should find us way down the bottom with the lowest countries we have a AAA rating so thats not being broke unless S&P system is broke.

      all these people out of work so that's less tax coming in and welfare going out yep great budget - NOT!

      Commenter
      BarbC
      Location
      Melbourne
      Date and time
      May 14, 2014, 10:28AM
    • Ian, broke countries do not have AAA credit ratings and among the lowest debt to gdp ratios in the OECD. And I find your remarks about Public servants being given there marching orders quite offensive. Most I have dealt with are hard working people with kids and mortgages and are committed to public service. Like Holden and Ford workers, those sacked will be significantly challenged by their loss of employment.

      Commenter
      Eric
      Date and time
      May 14, 2014, 10:29AM
    • It's true, Karina, people like you just don't get it. Labour has spent on the credit card to the point that it's simply maxed out. The Libs are fixing it. Period.

      Commenter
      mark
      Date and time
      May 14, 2014, 10:41AM
    • The $7.00 fee for doctors is great. We have 23 million people and 253 million free doctor services per year. That is 11.5 visits each to the doctor. Seems excessive and wastful. Means some people must go to the doctor 100's of times a year. How can people be against this measure.

      Commenter
      reader
      Date and time
      May 14, 2014, 11:05AM
    • Sorry Karina, but this will just help people clogging up our health system with a scratch on the knee. I believe at least a $30- charge for emergency room visits is in order again to stop silly little issues holding up major issues in our EMERGENCY ONLY ROOMS. The budget was brilliant, Hockey did really well and every economist last night on the ABC (Labors best mates) revealed they thought it was the best possible budget to brought to the table and were in fact very happy with it. Its is now time for everyone to repay Kevin's $900- you all took it when it came around so no point is whinging now they need to repay the pot

      Commenter
      Paying the Piper
      Date and time
      May 14, 2014, 11:25AM
    • Eric, broke countries can have AAA rating because it is a comparison of us to all teh other broke countries. All it means is of the broke countries they are extremely confident that we will make all possible endevours to pay our debt, it does not mean we are in a good financial position.

      Commenter
      Jane2
      Date and time
      May 14, 2014, 11:58AM
    • reader:
      If you are on a serious ongoing drug treatment, have one of a wide range of chronic illnesses, are diabetic, or are in the early stages of recovery from a serious illness, you are likely to be monitored by your GP. This may involve two or three visits a week. It involves regular blood tests which are also earmarked for co-payments.
      These payments will be on top of other payments related to treatment.
      It's actually quite rare to have only one visit to the GP for an illness these days.

      I hope that goes some way to answering your question, and explaining why this charge is so bad for the elderly, who are particularly likely to be treated by GPs in this way;

      And all for a "fund" that will itself turn out to be a deceit, as far as I can see.

      Commenter
      but...
      Date and time
      May 14, 2014, 2:37PM
    • Not right Jane 2. According to S and P ‘AAA’ means "Extremely strong capacity to meet financial commitments. Highest Rating." Would hardly indicate a country is broke.

      Commenter
      Eric
      Date and time
      May 14, 2014, 3:25PM

More comments

Comments are now closed

Related Coverage

Federal budget reveals new public service building for Tuggeranong

Tuggeranong has emerged as the ACT's only winner from Tuesday's federal budget with the Department of Social Services receiving $26.8 million towards a new office.

Federal budget hits Canberra, public service hard

Misery loves company – that's Canberra's main problem in the wake of Tony Abbott's first budget.

Budget to cut 16,500 public service jobs

The federal bureaucracy is poised for its greatest loss of staff since the early years of the Howard government.

Federal Budget 2014: News, analysis and comment

Follow Australia’s best coverage of the 2014 federal budget with Fairfax Media’s leading economic, political and business reporters, commentators and analysts.

More than 70 government agencies to be scrapped, consolidated in federal budget

Government to consolidate and scrap more than 70 government bodies.

Federal budget 2014: At a glance

Federal Budget 2014: The budget at a glance

Federal budget 2014: Where will your tax dollars go?

Use our interactive calculator to find out exactly where every one of your tax dollars went in this budget.

Federal budget 2014: Winners and losers

Those who gain and those who feel the pain of Treasurer Joe Hockey's budget

500 DFAT public service jobs to go after 2014 federal budget

About 500 public service jobs will be cut at the Department of Foreign Affairs and Trade in the next 13 months, DFAT bosses have warned.

Related Coverage

Follow Us





Featured advertisers

Special offers

Credit card, savings and loan rates by Mozo

Executive Style