The axe is expected to fall heaviest on former AusAID staffers in Civic.

The axe is expected to fall heaviest on former AusAID staffers in Civic. Photo: Andrew Taylor

Canberra was confronted on Wednesday by the full impact of the federal budget on the jobs, careers and families of tens of thousands of local public servants and other government workers.

Departmental bosses across the capital warned of painful times for government officials and their families as they broke the news to their workers of thousands of job losses, with disastrous knock-on effects predicted for the region’s economy.

The loss of 500 full-time positions from the Department of Foreign Affairs, with the axe to fall most heavily on former AusAID staffers in Civic, will hit the capital hard.

Canberra will also bear the brunt of the loss of more than 700 jobs from the industry portfolio and in health and its portfolio agencies, 689 jobs were expected to go, many of them in the ACT.

Mystery still surrounds the government’s plans to ship 300 public servants to Gosford on the NSW central coast to share a new building with 300 Taxation Office staffers whose relocation to the regional town was announced in the budget.

DFAT secretary Peter Varghese told his 4200 workers that forced redundancies would only be used as a "last resort" with the axe to fall most heavily on former AusAID staffers and officials working in DFAT’s "corporate services".

"While the full implications of the budget have not yet been worked through, our current assessment is that there will need to be a reduction of about 500 APS positions over the course of the 2013-14 and 2014-15 financial years," Mr Varghese.

"Divisions providing corporate services and delivering or supporting the delivery of the aid program will be most affected by the reductions."

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Despite the loss of more than 700 jobs from her department and its agencies, Industry secretary Glenys Beauchamp told her workers that she believed she could avoid "blanket voluntary redundancies".

"The efficiencies and the reductions we have already made in our staffing numbers over the last six months means we are now well placed to manage within the budget we have been allocated over the forward estimates without the need for large blanket voluntary redundancies," Ms Beauchamp wrote.

CSIRO chief executive Megan Clark wrote of painful days ahead for another 500 scientists and researchers, many of them Canberra-based, who face the chop after deep cuts to the science organisation’s budget.

Proportional cuts could lead to 6500 jobs lost in Canberra and left-leaning think-tank the Australia Institute research shows this would cost at least another 2300 jobs elsewhere in the Canberra economy, most of whom would be employed in cafes and restaurants and some others would work in trades. 

The institute says territory household spending would be reduced by hundreds of millions of dollars a year because of the city's sensitivity to changes in the bureaucracy.

But it is not just current public servants feeling the pinch.

Superannuated Commonwealth Officers' Association president John Coleman said superannuation pensions for retired civil servants was often below the poverty line - so low many members qualified for a part-age pension - which would now be weakened by a budget measure to index in line with inflation rather than a cost-of-living calculation.

Australian Taxation Office workers were told by their bosses in the wake of the budget that they face more work enforcing Treasurer Joe Hockey’s tax hikes, with fewer public servants to carry the load.

Commissioner of Taxation Chris Jordan says the ATO’s workforce should brace for years of job-loss pain in the wake of Tuesday’s budget.

In an email bulletin sent to all staff on Tuesday evening, Mr Jordan told his workers that the jobs would have to be culled by October 1.

"We are expected to find savings in our operating costs and have also been requested to reduce our staffing by 2100 people by 31 October 2014," the commissioner wrote.

"This is in addition to the expected 900 exits from natural attrition and redundancies in 2013-14 and will take to 3000 the number of staff exits from the ATO since July 2013."

Mr Jordan told his workforce that the Temporary Budget Repair Levy, the scrapping of certain tax offsets and tax concessions, fuel duty indexation, the deferral of superannuation guarantee increases and changes to super contributions would all add up to extra work for the ATO.