In his first speech on the public service since the portfolio was added to his finance responsibilities after the Liberal leadership spill, Senator Cormann set out his vision for a more innovative and responsive APS, as well as stridently defending cost-cutting undertaken by the government.

"When we improve the efficiency and productivity of the public service, we create space in the budget for outward facing programs and services, which directly benefit Australians," Senator Cormann said.

"I have for many years made the point that public service spending, yes, should be as much as necessary but also should be as little as possible – that we should always focus on the value of activity and that we have a responsibility to ensure that taxpayer dollars are spent wisely."

Delivering high quality government services at a low cost were not mutually exclusive goals, the minister said.

"They are certainly competing objectives. That is, it is certainly fair to say that it is a matter of finding the right balance," Senator Cormann said.

Addressing the APS Wide conference on Wednesday, hosted by the Australian Public Service Commission, the minister said increasing productivity wasn't just about the government's bottom line.

"It is not just about saving money, it is also about higher quality services delivered in new and different ways, about better public policy outcomes."

Acknowledging controversial topics like the average staffing level cap and the use of contractors, Senator Cormann not only defended cutting the amount spent on administration, but said they made for a better public service.

The staffing level cap, along with the annual efficiency dividends that have been in place since 1987 had been effective in getting the budget under control, the minister said.

"The overall cost of the federal government’s administration as a proportion of overall expenditure, including, dare I say, the cost of consultants and contractors supporting government administration, has fallen from 8.5 per cent in 2007-08 to 6.8 per cent in 2017-18 and is projected to continue to fall to 5.6 per cent by 2021-22."

The minister repeated his support for the use of private sector contractors and consultants, and flagged that their use would continue, and even increase. Senator Cormann referred to David Thodey and Elizabeth Alexander's review of the Public Governance, Performance and Accountability Act, which said government should "routinely tap into a diversity of views and expertise in developing strategies and policy".

"I strongly endorse this view. We do it, but we could do more of it," the minister said.

Using outside advice "should never be seen as a weakening of the APS," Senator Cormann said.

"To the contrary, I believe these are all approaches that strengthen the Australian public service."

The new minister also set out a vision for the future of the APS, which he described as "world class" and "outstanding".

"The 'state of the service' is strong," he said.

Public servants were encouraged to embrace change and new ways of working, and the use of cross-portfolio taskforces was singled out as one of the more effective ways of responding to public policy challenges.

"The APS works at its best when it is open to new ways of operating and prepared to move on from old familiar ways – where it takes opportunities to anticipate the needs and requirements of the government of the day on behalf of the Australian community," he said.

"Innovation won’t always be digital, but it will always mean working differently and in new and better ways."