One in seven public service jobs would be axed and the state’s budget returned to a cash surplus within six years under Opposition Leader Jess Wilson’s plan to rebuild Victoria’s finances.
In her first substantive reply to this week’s state budget, Wilson will on Friday detail her plan, if elected in November, to enforce a hiring freeze on what she labels “back-office roles” across the Victorian public sector throughout the entire first term of a Coalition government.
The impact of the policy, according to modelling done by the Parliamentary Budget Office, would reduce the public service from its 1 January 2027 size of 49,408 full-time equivalent positions to 42,224 positions by July 2029.
Wilson will tell a lunch of business leaders and Liberal Party figures on Friday that the reduction of 7184 positions – one in seven currently employed in the service – will save the budget $22 billion over a decade. She will also pledge to return the budget to a cash-positive position within six years.
The twin promises underpin one of Wilson’s key campaign messages – that Victoria’s finances are unsustainable.
Returning Victoria to a cash-positive position means the state would earn more revenue than it spends on recurrent costs and capital works combined. This has not happened for a decade.
Tuesday’s budget forecast a $7.7 billion cash deficit for the next financial year and similar sized deficits in each of the forward years through to the end of the decade. These deficits will add to Victoria’s net debt, which is forecast to reach nearly $200 billion by 2029-30.
Economists such as Saul Eslake have repeatedly said that Victoria can only start to pay down debt once it stops spending more than it earns and that cash surpluses, rather than operating surpluses, are the bottom line of any budget.
Treasurer Jaclyn Symes this week boasted of a $727 million operating surplus, the first in seven years.
Wilson’s speech to Enterprise Victoria, a business forum established and operated by the Liberal Party, is designed to open public discussion about debt reduction.
The big hiring freeze, which Wilson says will be enforced across 46 government departments and agencies, is her first significant budget saving announced since taking over the Liberal leadership and becoming shadow treasurer.
It is likely to provoke a furious response from the Community and Public Sector Union, whose members are already feeling the brunt of a budget squeeze under the Allan government.
Wilson insists the hiring freeze will only apply to “back-office” roles within the public service and will have no impact on the number of teachers, police or firefighters employed across the broader public sector. She will offer an “Essential Services Guarantee”, which she says will prioritise funding to government services that people rely on most.
“Rightsizing back-office public service roles is a difficult, but necessary measure I am willing to take to guarantee essential services and repair Victoria’s finances,” Wilson will say in the speech.
“Victorians are paying more than ever for these back-office roles, but outcomes and services continue to deteriorate. It is time for a new approach that puts the essentials first.
“Victorians deserve a government honest about the challenges we face. My Liberal and Nationals team did not create the financial mess Victoria is in, but we have a clear, measured and responsible plan to fix it.”
The CPSU has previously pointed out that the Victorian Public Service includes important frontline roles responsible for delivering essential services.
The VPS expanded rapidly in the early years of the Andrews government. It is now 60 per cent larger than it was in 2014, when Labor returned to power. The make-up of the VPS has also changed, with a greater proportion of executive positions.
Symes commissioned former top bureaucrat Helen Silver to review the public service. Silver’s recommendations, which the government has largely adopted, have resulted in the merger of some government entities and the scrapping of others.
Symes and her predecessor, Tim Pallas, both sought to reduce the size of the public service and the number of executive positions. The budget forecasts VPS wages will grow by an average of 3.3 per cent a year over the next four years.
The PBO calculates that under Labor’s current policy settings, the public service would reach 50,801 FTE positions by 2029-30.
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Chip Le Grand leads our state politics reporting team. He previously served as the paper’s chief reporter and is a journalist of 30 years’ experience.Connect via email.
