The Coalition is ramping up its budget and economic messaging ahead of the next election, with plans that could reshape the federal workforce. The Sydney Morning Herald reports renewed focus on the scale of the public service and its financial implications.
Opposition Leader Peter Dutton has outlined a proposal involving tens of thousands of job reductions—drawing both support and criticism. Debate is mounting, but many details remain unclear as both sides position themselves on fiscal responsibility and government efficiency.
Coalition Targets Public Service Growth
Tuesday’s budget papers revealed the Albanese government is forecast to employ 213,349 public servants in 2025–26, marking an increase of 41,411 since it came to power.
That growth has prompted the Coalition to argue that government spending is escalating unsustainably, particularly with a $30 billion public sector wage bill and the return to a budget deficit.
In response to a journalist’s question, “40,000 was your target to cut?”, Peter Dutton replied: “That’s exactly right.” He added,
We want an efficient public service, but growing by 40,000 the number of public servants in Canberra is not going to help families put food on their table or deliver the services that they need as a family or as a pensioner.
The updated target is up from the previous figure of 36,000, which Dutton revised after the budget showed that Labor plans to hire an additional 3,400 government employees this year alone.
Staffing Cuts Linked to Medicare Funding
Dutton has linked the proposed savings from staffing reductions to his party’s commitment to fund Medicare on par with Labor’s recent health announcements. Despite the scale of the proposed cuts, Dutton insisted : “We’re not cutting frontline positions.”
He pointed to inefficiencies in departments that don’t directly deliver services, stating
We have a health department and an education department – the Commonwealth government doesn’t own a school, we don’t run a hospital, we don’t employ a doctor or nurse or a teacher.
Scrutiny on Health, Education and Veterans’ Departments
The Departments of Health and Education have been repeatedly highlighted by Coalition figures. On Wednesday, Shadow Treasurer Angus Taylor said:
We’ve seen bulk-billing rates collapse and yet the health departments have grown by 40 per cent. I mean, this is just insane stuff, and it can’t go on.
The Department of Veterans’ Affairs (DVA) has also come under consideration. While Dutton has pledged not to cut frontline roles, Finance Spokeswoman Jane Hume questioned the need to retain expanded staffing levels:
If it’s a backlog and you’re clearing it, why do they need to be permanent staff?
The department had grown under Labor in an effort to address a large volume of unresolved claims.
Attrition and Budget Black Hole Claims
When asked whether job losses would be immediate, Taylor responded: “Look, no, attrition will play a very significant role.” Dutton has not provided a detailed strategy for achieving the headcount reduction but is relying on the expected $6 billion in annual savings.
The Coalition has also raised concerns about transparency in Labor’s budget. Jane Hume stated :
They [public servants] have been given an 11 per cent pay rise and that hasn’t been accounted for in this budget. Public sector wages [are a] flat line.
She added:
Somewhere there is a black hole in this budget and we need Katy Gallagher and Jim Chalmers to front up and tell us where it is.
Government Defends Hiring Approach
Finance Minister Katy Gallagher defended the increase in staff, saying :
The vast majority of those … are already working, they’re just working under expensive labour hire arrangements as a hangover from the former government.
According to the budget, 87 percent of this year’s staffing increase—and one-quarter since 2022—came from converting consultants or contractors into permanent roles.
Gallagher also rejected the argument that more staff equate to inefficiency, referencing past administrative failures :
If you remember, we had robo-debt. We had 42,000 unallocated Veterans’ Affairs claims. Veterans who weren’t getting their payments because their claims weren’t being allocated.
