ACT Senator David Pocock has launched a scathing attack on the Albanese government's latest public service efficiency measures, warning that mandatory budget reductions could prove catastrophic for Australia's smaller government agencies.
Government Defends Cost-Saving Measures
Finance Minister Katy Gallagher has confirmed that her department has instructed senior public service leaders to identify cost-saving measures as part of broader efforts to rein in government expenditure. The directive requires agencies to shave up to 5 percent from their existing budgets, adding to existing financial pressures.
"We've asked agencies to think about all the things they're doing and make room for reprioritisation within budgets," Senator Gallagher stated. "We've been doing that since we came to government. This is another example of that approach we have to manage the budget."
Hypocrisy Accusations and Broken Promises
Senator Pocock has accused the Labor government of blatant hypocrisy, pointing to their election commitments to strengthen rather than diminish the public service. The independent senator highlighted the government's previous criticism of Coalition plans to cut 41,000 APS roles, now appearing to adopt similar cost-cutting approaches.
"We saw the Labor government run at the election on promises not to cut the public service, talking about how great the public service was, the need to fully resource it, the need to bring the contracting that's happened back into the public service," Pocock stated. "Now we hear they are actually going to potentially put a 5 percent efficiency dividend on them. This will be an absolute disaster for a lot of the smaller agencies."
The senator specifically named several critical institutions that would struggle to absorb such reductions, including the Australian Federal Police, CSIRO, National Gallery and National Library.
Union Backlash and Broader Impacts
The Community and Public Sector Union has joined the criticism, describing the potential budget cuts as "extremely concerning" and warning they would inevitably lead to job losses and reduced service delivery.
"The federal government was re-elected with a promise of continuing the work of investing in the rebuilding of public services, not cuts," the union declared in an official statement. "Arbitrary budget cuts across the public service hurt public services and inevitably result in job losses."
Both the CPSU and the Australian Federal Police Association have taken the unusual step of writing directly to Senator Gallagher seeking clarification about the proposed measures.
Existing Financial Pressures and Job Losses
The latest savings drive comes on top of existing efficiency measures that have already placed significant strain on public service agencies. The government had previously directed agency heads to cut $800 million from their collective 2025-26 budgets, part of a broader commitment to reduce non-wage expenses by $6.4 billion over four years starting from July 1, 2025.
This comprehensive savings plan includes:
- $1.6 billion in cuts for 2026-27
- $2 billion in reductions for 2027-28
- $2 billion in savings for 2028-29
These measures build upon $4 billion already cut from APS outsourcing in the government's first two budgets since taking office in 2022.
According to reports from the Australian Financial Review, the new savings requirements would be in addition to the standard 1 percent annual efficiency dividend and aren't expected to be finalised until the May 2026 federal budget.
The financial pressure has already triggered significant job losses across multiple agencies. CSIRO has eliminated approximately 818 positions over the past 18 months as part of restructuring efforts to save $120 million. Meanwhile, Treasury plans to cut 250 jobs over two years through redundancy programs, and the Social Services Department faces a projected budget decrease from $636.4 million in 2024-25 to $424.6 million by 2027-28.
The growing controversy highlights the challenging balance between fiscal responsibility and maintaining essential public services, with smaller agencies particularly vulnerable to budget reductions that could compromise their operational capacity.
