Coalition was warned of trouble cutting public service jobs

The Coalition was warned before taking government that it would take a ''very tight'' hiring freeze to achieve its 12,000 public service job cuts without mass redundancies.

The head of the Parliamentary Budget Office, which costed opposition policies before September's election, also told a Senate committee on Monday that his office predicted a slowdown in voluntary departures from the bureaucracy, making the target harder to achieve.

PBO chief Phil Bowen told the Senate estimates hearing his office faced ''data limitations'' as it analysed the Coalition's controversial public service policy in the lead-up to the election.

But the analyst said his office was clear in its advice that the hiring freeze would have to be strictly enforced.

''A tight constraint on both the engagement of new ongoing staff and re-engagement of non-ongoing staff, will be required for the policy to be implemented through natural attrition without recourse to additions [to] redundancy payments,'' he told the committee, quoting from his pre-election advice.

''We did look to see what was already being done, we assumed that a lot of the current reduction was due to redundancy payments, which have risen.


''If natural attrition was going to result in this further reduction then you have to have a very tight freeze on recruitment. You wouldn't be able to achieve it by natural attrition, if you simply replaced people who leave, no, you couldn't.''

Mr Bowen also said his office had predicted a slowdown in the number of public servants resigning without taking redundancy packages.

''We also assumed to achieve those savings there would most likely be a higher level of redundancy payments made and the underlying rate of natural attrition would continue, perhaps at a lower rate,'' he said.

Analysis by The Canberra Times has shown that the attrition rate has slowed to a trickle, with just 251 public servants leaving their jobs in the first seven weeks of the Abbott government, most of them being paid redundancy packages.

According to the data supplied to the PBO before the election, the government would have to cut more than 660 jobs a month between October and June next year as it looks to move quickly to lock in its projected savings.

Before the election, the Coalition believed its first tranche of cuts would be enough to reach its ambitious target of saving $303 million this financial year. The Canberra Times understands there are plans to cut 6000 more jobs in the 15 months between July, 2014, and September, 2015, and savings of $1.2 billion in the 2014-2015 financial year are expected, according to correspondence between shadow ministers and the PBO.

The Coalition's plan, which has still not been made public in detail, then calls for $1.7 billion in savings in 2015-2016 and $1.92 billion in 2016-2017 - $5.1 billion ripped out of the federal public service in the forward-estimates period.


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