Pallas takes knife to thousands of government jobs in name of budget repair
The Andrews government will slash up to 4000 public sector jobs over the next year as it seeks to repair the state’s finances and rein in spending.
Treasurer Tim Pallas outlined a $31.5 billion COVID debt repayment plan in Tuesday’s budget and vowed to bring the public sector back towards pre-pandemic levels.
The government will find $2.1 billion in savings as part of the repayment plan by cutting corporate and back-office jobs. This is on top of the $500 million it identified ahead of the November state election.
“Further savings will be achieved through reductions in labour hire and consultancy expenditure,” the budget papers state. “These savings are designed to make government more efficient and will not affect frontline services.”
The public sector wages bill, however, will slightly increase over the forward estimates. It will grow from $33.8 billion in this financial year to $38.2 billion in 2026-27.
“We need to get back from post-crisis environment to [business as usual],” Pallas said. “We would anticipate, essentially, the decisions around this will be made by secretaries in consulting with their departments.”
Pallas said the government would work with the union to help redeploy public servants who lose their jobs. He did not reveal the extent of the cuts, but said marketing and communications jobs, as well as ministerial advisers, would be axed.
Department of Treasury and Finance secretary David Martine earlier this year ordered heads of government departments to detail plans to cut their budgets by 10 per cent without “harming frontline services” – a move that could mean more than 5000 public servants would lose their jobs.
Pallas’ announcement drew the ire of Community and Public Sector Union secretary Karen Batt, who on Monday made a last-ditch plea to save those jobs.
“If [the government’s] desire is quality services for Victorians, then the budget cuts are counterproductive to achieving this desire,” Batt said. “It seems we’ve moved from borrowing to protect jobs to cutting jobs to protect the borrowings.”
Shadow treasurer Brad Rowswell said the public sector and the wages bill had doubled since Labor came into power almost a decade ago.
“When they say ‘the public sector has increased in size, it’s nurses and ambos and fireys and coppers’, it’s actually not,” Rowswell said. “There’s been a tripling of public servants earning more than half a million dollars. These are fat cats sitting in dimly lit offices in ivory towers far removed from the realities of communities.”
The deep cuts are reminiscent of the 2012 decision by the former Baillieu government to slash the number of public servants – initially by 3600, but then by 4200 – in a bid to shore up the budget bottom line.
At the time, the Coalition government insisted the cuts would not affect frontline staff such as police, teachers and child protection workers – a message that was ridiculed by Labor in opposition.
In June 2012, Tim Pallas, who was then Labor’s industrial relations spokesman, said: “Carving this many jobs from departments will have a massive impact on the delivery of key services.”
With Josh Gordon
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