The Treasury Building in Parkes on King Edward Terrace.

The Treasury Building in Parkes on King Edward Terrace. Photo: Jeffrey Chan

Treasury will not have a last-in-first-out policy when it comes to forcing staff into redundancies, employees have been told. 

Australia's top economic agency is perhaps the most major Commonwealth employer so far to resort to involuntary redundancies.

But the Treasury has told staff that graduates, new recruits or workers on leave without pay will not be specially targeted during a process that could see as many as 40 forced redundancies.

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Staff have been told Treasury's graduate intake has dropped by 60 per cent since its peak in 2010 but the program to introduce fresh university qualified labour to the department's workforce will be protected during the restructure. 

"Without a graduate intake, the department will develop capability and capacity gaps in the future," staff were told in a document on  proposed forced redundancies.

Staff were also told there were limits to how much could be saved on supplies as many millions of dollars had already been saved in recent years and more than 85 per cent of expenses related to staff and fixed expenses such as rent. 

A Treasury spokeswoman said it had been a difficult decision for the agency and was only made after a great deal of consideration by the executive.

"It comes at a time that the Treasury is undergoing a period of significant change, having to shrink by a third since the Secretary’s arrival in 2011," the spokeswoman said. 

The restructure will position the department to operate within its budget for next financial year and beyond.

Workforce projections indicated the department was on track to meet its budget for 2014-15 but would face deficits beyond that.  

"Staff have been informed that the involuntary process will need to result in a reduction in the region of 30-40 staff to achieve this," the spokeswoman said. 

"However, these numbers cannot be confirmed until the final number of staff who accept a voluntary redundancy is known and the final process will also incorporate feedback from staff consultations, which are under way."

Separate to forced redundancies, more than 30 staff have expressed interest in voluntary redundancies and these would be accepted, according to statements made by Treasury. 

Community and Public Sector Union (CPSU) national secretary Nadine Flood said the massive scale of the federal government’s cuts was increasing the risk of involuntary redundancies being used more broadly across the service.

"We are opposed to the use of involuntary redundancies as they are both cruel and damaging," Ms Flood said.

"We would urge management to work with us to explore alternatives such as extending the time frame of the current voluntary redundancy process, using job swaps and allowing staff from other agencies who are interested in taking a voluntary redundancy to swap into Treasury.”

Staff were told the department was continually reviewing all discretionary costs to identify opportunities to make savings in a range of areas including consultants, subscriptions, travel, conferences and training.

Overseas posts were funded separately and any reduction to these would result in a reduction to Treasury's funding.

An information session will be held for staff on Thursday. 

It is believed staff made involuntarily redundant would be informed in July.

Treasury wanted it to be done in a timely manner to reduce anxiety.  

Staff have been told the process of selecting staff for forced redundancies would be merit based within classification cohorts and would take into consideration the relative skills, knowledge and potential of individual staff.

No decision had been made on how the process would run but a model for consultation had been developed. 

It was likely the department would establish senior executive panels with an independent member to assess staff by classification.

"The panels could consider a short application, a current CV, performance appraisals where these were available and undertake referee reports – or some combination of these elements," staff were told.

"This will be a merit-based and impartial process that will be decided by the board after staff and their representatives have been consulted."