At least 4,000 Victorian public servants as well as a small army of contractors and consultants will be culled from the state’s bureaucracy under the state’s 2023-24 Budget in an effort to rein in debt and limit ballooning of the government’s payroll as wage rises flow through.
Victoria’s COVID Debt Repayment Plan released by treasurer Tim Pallas says frontline positions will be spared under the jobs cull that will be carved from mainly administrative roles.
“Our savings program will reduce our VPS levels by 3,000 to 4,000 roles in 2023-24, across corporate and back-office functions,” the statement says, adding that “further savings will be achieved through reductions in labour hire and consultancy expenditure”.
The figures, as they stand, are a little under the previously canvassed 10% reduction that was expected to shed some 5,000 jobs. It is unclear whether labour hire used to fill vacant VPS roles will be counted towards the main figure.
Eliminating or transferring positions backfilled by labour hire or contractors is a preferred savings tactic by many public sector staff managers because it usually spares the need for any large redundancy payouts and time-out periods that would be needed for permanent public servants.
“In the Victorian Budget 2021-22, we started the process of bringing the VPS back towards pre-pandemic levels, announcing $3.6 billion in savings and efficiencies as part of our fiscal plan to return to an operating surplus,” the Budget papers said.
Those job losses are also juxtaposed with the recreation of the State Electricity Commission, a state-owned utility enterprise that Pallas said will “train thousands of workers so the SEC can provide cheaper, cleaner energy”.
“The government will do its bit, restoring the public service back towards pre-pandemic levels, while not affecting frontline workers. We’ll make savings across government, totalling $2.1 billion over four years,” Pallas said.
Based on those target savings figures, the VPS cull may have to be deeper than the headline 4,000 positions because the salary level to that number would have to be $525,000 before other savings are factored in.
Assuming a salary of $250,000, the VPS would need to cull 8,000 jobs to hit $2 billion in savings.
The really big ticket item in the Budget is health, which gets another decent shot in the arm in terms of money, with jobs set to rise there.
“This Budget provides a further $4.9 billion to help our health system emerge strongly from the pandemic,” Pallas said.
“This brings our total additional health investment to more than $54 billion since coming into government in 2014. There’s a saying that if you save one life, you’re a hero. If you save a hundred lives, you’re a nurse. We’re funding extra nurses for our hospitals, as well as making it free to study nursing and strengthening nurse-to-patient ratios.”
The Andrews government is also backing itself in terms of technical job creation and renewable state-produced energy, with Pallas declaring the privatisation of once public assets to be a monumental failure.
“Thirty years ago our energy assets were sold outright – and these assets were run into the ground,” Pallas said.
“The SEC will increase renewable energy, reinvesting profits into Victoria rather than offshore. In this Budget, we’ll invest in the training we need for this workforce, with a new SEC Centre of Training Excellence.
“We’ll fund six new tech schools across the state to improve students’ hands-on learning in science and tech, to support the jobs of the future. That’s on top of 10 tech schools we’ve already built since winning government in 2014.
Pallas said the delivery of Victoria’s “nation-leading” renewable energy targets – that stand at 95% by 2035 and net zero by 2045 – would create 59,000 jobs “and increase gross state product by about $9.5 billion.”
Rating agencies say Victoria’s retirement of debt and financial recovery will be slow.
“Despite some positive developments, Victoria’s fiscal outlook remains weak compared with other Australian states,” rating agency S&P said.
“Victoria should be able to cut its after-capital account deficit by roughly half, to about 18% of total revenues between 2023 and 2025, compared with that in 2021 and 2022. Nevertheless, the record spending on the ‘Big Build’ infrastructure pipeline will ensure that the cash deficit remains large.”
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