Finance and Public Service Minister Katy Gallagher and Treasurer Jim Chalmers insist the government has no plans to slash APS numbers. Photo: Andrew McLaughlin.
The Parliamentary Budget Office has delivered a blow to the Federal Government’s plans for a return to surplus, saying it could only likely be achieved through a drastic cut to public service numbers.
The PBO’s independent analysis, published Tuesday (14 July), suggests the Australian Public Service would need to be reduced by about 41,000 employees over the next decade for the budget to return to balance by the forecast 2034-35.
Average staffing levels (ASL) would have to be reduced from 217,256 (which the service is forecast to reach this financial year) to about 189,000 by 2030, then to 176,000 by the middle of the decade.
But the government says there are no plans to slash APS jobs, despite the PBO’s predictions.
The analysis assumes the current 1 per cent efficiency dividend would continue over the next decade and that spending on APS projects would decline by more than 0.5 per cent of Gross Domestic Product.
The PBO states that such cuts across the APS are unlikely to be made in that timeframe.
It put forward three scenarios of how the budget’s bottom line would be affected with and without significant cuts.
Baseline ASL: PBO assumes the efficiency dividend and indexation of departmental appropriation continue over the medium term in line with current arrangements.
“The efficiency dividend helps drive the return to budget balance in 2034-35. ASL would be around 189,000 at the end of the forward estimates and 176,000 at the end of the medium term,” the PBO states.
Flat – ASL is constant at 2025-26 levels: ASL remains unchanged over the medium term. This increases public service spending by $8.5 billion in 2036-37, delaying the return to surplus by one year to 2035-36.
“ASL would be 216,000 at the end of both the forward estimates and the medium term.
Grow with population: ASL grows in line with the population over the medium term. This increases spending on the public service by $14.2 billion in 2036-37, delaying the return to surplus by one year to 2035-36.
“ASL would be around 226,500 at the end of the forward estimates and 244,500 at the end of the medium term.”
The Coalition has seized on the numbers as evidence that Labor’s return to budget balance can only be achieved by massive jobs cuts across the APS.
Liberal senate candidate for the ACT, Nick Tyrrell, said the analysis reveals Labor’s secrecy over plans to make Canberra pay for a surplus it didn’t vote for.
Liberal Party senate candidate for the ACT, Nick Tyrrell, says Labor can’t have it both ways when it comes to APS jobs and budget surplus. Photo: Michelle Kroll.
He pointed to Finance and Public Service Minister Katy Gallagher, who accused the Coalition of being reckless in suggesting such a high level of APS jobs would have to go.
“Senator Gallagher is not a passenger here,” he said.
“She is the Finance Minister who signs off on Labor’s budget; she is the Public Service Minister responsible for the very workforce that the budget quietly writes down by 41,000; and she is a Senator for the ACT, after 25 years as a Labor politician in this city.
“She holds all three hats. She cannot wear one to Senate Estimates and another one when she comes down off Capital Hill.
“So if the minister is planning on sticking around for the future, she has two options, and only two: She can deliver the cuts – the very cuts she called reckless – or she can admit the surplus being sold to the nation does not survive contact with her own promises.
“She cannot have it both ways. The Parliamentary Budget Office has now made that arithmetic crystal clear, and very public.”
Senator Gallagher is on leave. A spokesperson for Treasurer Jim Chalmers, who is currently also the Acting Finance and Public Service Minister, downplayed the projections and the Opposition’s take on the analysis.
“There is no direction from the government to cut public service jobs,” they said.
“We have been clear the APS is broadly the right size, and we do not expect an overall reduction in its size.
“The only party promising to cut public service jobs are the Liberals.
“In May, the Leader of the Opposition announced he would abolish the Department of Climate Change, Energy, the Environment and Water, which employs thousands of public servants.
“They have also flagged cuts to agencies and public servants working on housing.”
The Federal Government is not tied to PBO assumptions or responsible for them.
It publishes its own ASL figures for the APS in the same way as previous governments.
Original Article published by Chris Johnson on Region Canberra.
