Hundreds of Australian Customs officers face the sack after the Abbott government refused to permit their department to run a $30 million budget deficit.
Finance Minister Mathias Cormann has told Customs and Border Protection chief Mike Pezzullo to save the money from his staffing budget rather than allow his agency to slip into the red.
The decision could cost the jobs of more than 350 mid-ranking officers around the nation or more than 450 junior customs workers.
It is understood Mr Pezzullo wrote to the minister last month, in accordance with protocols in place for public service chiefs, asking for consent to run the budget deficit this financial year.
In a statement, Mr Cormann said he wanted departments to live within their means. Customs refused to comment on the minister's decision.
According to recent modelling by federal workplace authority the Public Service Commission, $30 million a year is the equivalent of about 350 mid-ranking (APS6) officers or more than 450 junior ones.
Mr Pezzullo said late last year that government budget cuts had led to more than half a billion dollars and 740 staff being cut from the service over the past five years.
He told a conference in Melbourne there was no more fat to cut in his department and that he would soon "be going through bone" if asked to reduce spending further.
But Mr Cormann was unmoved by Customs' plea. In response to questions about his decision, the minister said Customs already received more than $1 billion of taxpayers' money and was expected to manage within that amount.
''All government departments are expected to manage within their budget allocations,'' Mr Cormann said.
''Customs has a yearly budget allocation of more than $1 billion.
''Naturally, our preference is for Customs to manage within their budget allocation as we expect all other agencies to do.
''Contrary to the situation under the previous government they now can access funding to pay for the voluntary redundancies caused by decisions made by the previous government.
''If despite their best efforts, as a result of the cuts imposed by Labor they can't, we will address that in the budget in the normal way and not through a premature decision immediately after the release of MYEFO [mid-year economic and fiscal outlook]."
The minister said the budget difficulties of federal departments and resulting job losses were the fault of the Labor government.
''The previous government did impose additional cuts on government departments, before the election, which are causing staff cuts to the tune of about 14,500 across government, which were not disclosed by Labor before the last election,'' he said.
''Incredibly Labor had not allocated sufficient funding to deal with the redundancies caused by those pre-election cuts."
A Customs spokesman refused to comment on the exchange between Mr Pezzullo and the minister.
"The Australian Customs and Border Protection Service does not comment on discussions it may or may not be having with the government in relation to the service's budgetary position," the spokesman said.