The Victorian government will slash 1,000 public service jobs, including more than 300 executive positions, and merge several entities, as part of its response to an independent review into the sector, which it claims will save $4bn.
But the treasurer, Jaclyn Symes, has not accepted every recommendation of the review into the Victorian public service (VPS), led by Helen Silver and released on Thursday, which called for a far larger reduction of 2,068 positions.
The job cuts are also lower than those forecast by Symes when she ordered the review in February, at which time she suggested 5% to 6% of the workforce – or between 2,000 to 3,000 positions – could go.
Addressing the job losses, the premier, Jacinta Allan, said families were “watching every dollar in their household budgets, and they expect their government to do the same”.
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“We are looking at ways to keep our Victorian public service laser-focused on delivering those frontline services that matter most,” Allan said.
Silver, a banking executive and former head of the Department of Premier and Cabinet, described the VPS as a “capable and dedicated workforce” but said it had become too “top-heavy”, with executive numbers rising by 52% since 2019.
“This type of structure is costly, decisions are slower, staff are disempowered, and innovation is stifled,” Silver said in her report.
The government accepted Silver’s recommendation to cut 332 executive roles across the VPS, saving $359m over four years. It also accepted a recommendation to cap the number of VPS5 and VPS6 positions at 15%, saving $125m over four years, though this was not expected to lead to an immediate headcount reduction.
It estimates it will also save $50m by cutting CBD office space – a result of public servants working from home two days a week – and $113m on spending less on consultants and labour hire.
Silver also recommended 78 government entities be scrapped or consolidated and that 90% of the state’s 90 advisory committees be wound up. She said there were more than 500 public entities and 3,400 boards in Victoria, which were “costly and unwieldy”.
“These arrangements come at a substantial, direct and indirect cost to government,” Silver wrote, noting they cost $35bn to run each year.
The government supported the recommendation in part, committing to consolidating 29 entities, while work has begun to cut the number of advisory bodies, with Symes noting there were currently “too many”. Those on the chopping block include committees dedicated to sheep and goat compensation and identification, the strawberry industry and responsible pet ownership.
Symes admitted to an error in a press release that said the government would save $427m as a result of the measures, when the true figure was just $27m.
Among entities to merge is VicHealth, the state’s independent health promotions agency, which will be absorbed into the Department of Health. This drew condemnation from the Public Health Association, which immediately launched a campaign to save “one of the world’s leading preventive health agencies”.
The Greens said the merger spelt the “death” of VicHealth’s independence.
“VicHealth has always been willing to take on the big corporate interests that harm Victorians’ health, like the junk food industry, big tobacco and alcohol, and gambling – something the Allan Labor government has repeatedly demonstrated they’re too afraid of doing,” the party’s health spokesperson, Sarah Mansfield, said.
Meanwhile, the functions of five separate agencies will combine into a new consumer protection regulator, while three food safety regulators for dairy and meat will merge into Safe Food Victoria.
Cladding Safety Victoria, Latrobe Health Assembly, Road Safety Camera Commissioner and Reference Group, Sustainability Victoria, Trade and Investment Board, Victorian Marine and Coastal Council, and Victorian Public Sector Commission Advisory Board will all be wound up.
Several human rights officers and commissioners will also merge into the Victorian Equal Opportunity and Human Rights Commission, including those for LGBTIQA+ communities, gender equality, children and young people and multicultural affairs.
Symes will introduce legislation to parliament on Thursday to facilitate some of the changes but she said it would take time for all mergers to occur and the government may “go further in the future”.
The government claims its cost-cutting measures will save the budget more than $4bn over the next four years, but it has not accepted all of Silver’s recommendations which would have resulted in projected savings of about $5bn.
Among those rejected were recommendations to abolish Infrastructure Victoria, consolidate 14 water corporations into three and merge Heritage Council Victoria into Heritage Victoria.
Labor has also refused to end the doctors in secondary schools program, musical instruments for secondary students and the rollout of free kinder. But grants to Melbourne city council for transport initiatives and special Covid-19 leave for health workers will be cut.
Symes ordered the Silver review in February in one of her first acts as treasurer, in an effort to curb the growing cost of employee expenses – which make up about a third of the government’s total spending.
But Victoria’s opposition leader, Jess Wilson, said the savings were “a drop in the ocean” considering the state’s debt – which is set to total $194bn in 2028-29.
“Since this report was handed to Labor in June, Victoria’s net debt has grown by almost twice the claimed savings Labor’s cuts will deliver,” she said.
Mitch Vandewerdt-Holman, assistant secretary of the Community and Public Sector Union, said while the union would “fight to save as many jobs as possible” it welcomed the focus on axing executive positions, adding that there is “definitely more room” to cut further senior roles.
