'Absolute disaster': Pocock, public sector union warn against APS cuts

Finance Minister Katy Gallagher confirmed a report in the The Australian Financial Review that her Department had ordered senior bureaucrats asking them to detail cost-saving measures as part of efforts to curb government spending.

"We've asked agencies to think about all the things they're doing and make room for reprioritisation within budgets," Senator Gallagher said in a statement.

"We've been doing that since we came to government. This is another example of that approach we have to manage the budget."

Senator Pocock accused the Albanese government of hypocrisy after "bashing" the Coalition while trying to sell its former policy to cut 41,000 APS roles.

"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," he said.

"Now we hear they are actually going to potentially put a 5 per cent efficiency dividend on them. This will be an absolute disaster for a lot of the smaller agencies.

"If you look at the AFP, the CSIRO, the Gallery and the [National] Library, they cannot get by with a 5 per cent reduction in their budget."

Later, during Question Time, Senator Gallagher pointed out national cultural institutions including the National Gallery were made exempt from the current efficiency dividend.

She said Labor was "not looking to" reduce the total average staffing level in the APS.

The Community and Public Sector Union said any potential cuts to APS agency budgets "are extremely concerning."

"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 said in a statement.

"Arbitrary budget cuts across the public service hurt public services and inevitably result in job losses. The impact of this is always felt by the thousands of Australians who rely on public services every day."

The CPSU and the Australian Federal Police Association have each written to Senator Gallagher seeking clarification.

The government directed agency heads earlier this year to slash $800 million from their collective 2025-26 budgets to deliver on the Albanese government's 2025 election commitment to cut $6.4 billion from non-wage expenses including travel, hospitality, labour hire, advertising, legal and property services over four years from 1 July 2025.

This measure includes further savings of $1.6 billion in 2026-27, $2 billion in 2027-28 and $2 billion in 2028-29 and come on top of $4 billion cut from from APS outsourcing in the Albanese government's first two budgets since winning government in 2022.

According to the AFR, the new savings would be in addition a mandatory 1 per cent annual efficiency dividend and were not expected to be finalised until the May 2026 federal budget.

The CSIRO has cut about 818 jobs over the past 18 months, as part of an ongoing restructure to save the science agency $120 million.

Treasury plans to cut 250 jobs over two years as the department resorts to redundancies to try to balance its budget, while the Social Services Department's budget is projected to fall from $636.4 million in 2024-25 to $424.6 million by 2027-28,