Public sector redundancy payouts cost the Australian taxpayer $580 million in 2013-2014, according to the year's Final Budget Outcome.
The figure represents a blow-out of more than 100 per cent on the $273 million estimated in May's budget and dwarfs the previous all-time high of $261 million paid out, mostly to departing public servants, in 2012-2013.
But in a clear sign that public service cuts are starting to tell on the nation's bottom line, the public sector wage bill has fallen by more than $700 million compared with the government's estimates just four months ago.
The Final Budget Outcome reveals the Commonwealth's "wages and salaries" bill for 2013-2014 was $18.8 billion against a prediction in May of $19.5 billion, probably reflecting several years of efficiency dividends, redundancies and other cuts.
Treasurer Joe Hockey said the blow-out in redundancies was the result of the previous Labor government forcing job losses on the public service without putting money aside to pay for redundancy packages.
"The Labor Party failed to pay for the redundancies they announced, they funded 800 redundancies but they actually accounted for 14,500," the Treasurer said.
Finance Minister Mathias Cormann said the redundancy bill was a "legacy issue" from the Labor government.
"We inherited a deteriorating position so what we set out to do to [was] ensure in our first budget update in December last year the assumptions we use for our estimates were more realistic, that we took into account all of the legacy issues that Labor had left behind, not providing funding for public sector redundancies," he said.
Labor's employment spokesman Brendan O'Connor described the bill for golden handshakes as "beyond the pale".
"It's no secret the Coalition is obsessed with slashing government services, but this is beyond the pale," Mr O'Connor said. "The Coalition's enthusiasm to sack 16,500 public sector workers is not only damaging service delivery, it's also blowing the budget."
Treasury has a history of grossly under-estimating the government's redundancy bill.
Last year's Mid-Year Economic Forecast predicted "redundancies and separations would cost just $77 million in 2013-14 and $133 million over the remaining three "out years".
In 2011-12, when the public service was still growing, Treasury predicted a payout bill of $57 million, but eventually paid out $234 million.
The year before it paid $169 million in golden handshakes, despite forecasting $52 million.
The massive public sector redundancy bill contributed to a final budget deficit for the 2013-14 financial year of $48.5 billion - $30 billion more than forecast and Australia's second largest in dollar terms.
But Mr Hockey and Mr Cormann said the government had been able to "stabilise" the situation and they believed challenges facing the global economy could be beaten.
Mr Hockey said that 60 per cent of the $30 billion deterioration in the bottom line was from the write-down of receipts, particularly tax receipts.
"This comes down to the fact that Labor continually overestimated the amount of tax that they would collect, they continually got it wrong," Mr Hockey said.
"This is not a confected figure. It is the real numbers."
Mr Hockey said that government decisions, including his call to transfer $8.8 billion to the Reserve Bank, accounted for $11 billion of the $30 billion blowout.
Shadow treasurer Chris Bowen hit back at the Treasurer's claims.
The Labor frontbencher said the Abbott government had to accept responsibility for the poor result after a year in control of the budget.
"Last time we checked, the Abbott government has been responsible for budget and economic policy since September 2013. That's 75 per cent of the 2013-14 financial year," Mr Bowen said.