Victoria’s government has initiated significant reforms to its public service in response to escalating debt levels, with the aim of streamlining operations and reducing costs. The independent review, ordered by Treasurer Jaclyn Symes in February, sought to return the workforce size to pre-COVID-19 levels while eliminating inefficiencies. The findings, released on Thursday, outline a comprehensive strategy to cut costs and consolidate entities within the government.
In the lead-up to this initiative, Tim Pallas, Ms. Symes’ predecessor, had proposed reducing the public service workforce by 3,000 to 4,000 positions in the 2023/24 budget. Despite these efforts, employee numbers actually increased slightly. The May state budget indicated that Victoria’s total wage bill is projected to rise from $38 billion in 2024/25 to $42.4 billion by 2028/29. Meanwhile, the state’s net debt is forecasted to reach a staggering $194 billion by mid-2029, leading to daily interest repayments nearing $29 million.
The review’s final report was delivered to Ms. Symes on June 30, 2023, with the government agreeing to accept 45 of the 52 recommendations in full or in principle. Key changes will include the elimination of 332 executive and executive-like roles, projected to save approximately $359 million over the next four years.
Major Cost-Cutting Measures Announced
Several cost-saving measures have been outlined as part of this initiative. The Victorian government plans to cap positions at VPS5 and VPS6 levels at 15 percent, aiming to save $125 million. Additionally, the government will cut spending on consultants and labor hire by 10 percent, which is expected to result in savings of $113 million. Office space costs will also be reduced by $50 million, and the number of public entities and boards will decrease by 29.
The review also highlights several major restructurings within the state’s public entities. Notable consolidations include transferring VicHealth and HealthShare Victoria into the Department of Health. Furthermore, the regulatory activities of PrimeSafe, Dairy Food Safety Victoria, local councils, and the Department of Health will be merged into a newly established body called Safe Food Victoria.
Other significant changes involve creating an Outdoor Regulator by merging the Game Management Authority with the Victorian Fisheries Authority, and absorbing Recycling Victoria into the Environment Protection Authority. Functions of the Office of the Racing Integrity Commissioner and the Victorian Racing Integrity Board will be combined into a new entity known as the Racing Integrity Commission Victoria.
Rejections and Future Outlook
Despite the extensive reforms, seven recommendations were rejected, notably the cessation of programs for doctors, dentists, and music in schools. Premier Jacinta Allan has assured that there will be no job losses for frontline employees, including teachers, nurses, police, and child protection workers.
These sweeping changes reflect the Allan government’s commitment to addressing the financial challenges facing Victoria while aiming to maintain essential public services. As the government embarks on this path of reform, the effectiveness of these measures in curbing rising debt and improving efficiency will be closely monitored in the coming years.
