Public service loses 38,000 jobs, with 24,000 to come, Crikey research finds

Governments have been more than willing to bail out marginal manufacturing industries to prevent the loss of hundreds of jobs — but what about when it’s the government doing the sacking, and there are tens of thousands of jobs at stake?

There’s an industry which has confronted sweeping job losses recently, and it’s nothing to do with making cars or aluminium. A Crikey analysis has found that 38,000 jobs have been culled from the state and federal public service over the past few years, and a further 24,000 positions may follow.

Not since 1996 has the public service seen anything like it; as many as 62,000 public servants — in an arc stretching from Queensland to Tasmania via Canberra — losing their jobs. Anecdotes abound of incessant office farewells, of teams reduced to skeleton staff, of bureaucrats reapplying for their jobs while the headcount shrinks.

So is this a case of “public service bashing” as premiers look for the easiest way to tighten their budgets — leaving the public with substandard services? Or is it a justified way to balance the books after a halcyon era of bureaucratic expansion?

James Whelan, research director of the Centre for Policy Development’s public service program, says there’s been nothing like it since John Howard cut a third of the public service in 1996. “There are times when the public service is cut dramatically, this would appear to be one of them,” Whelan told Crikey.

The cuts have hit hardest among state bureaucracies, partly because new conservative governments are seeking to demonstrate their fiscal prudence. NSW has cut an estimated 15,000 jobs, while 7500 have gone in Queensland. South Australia is cutting 5150 jobs, Victoria 4200, and Tasmania just under 2000. (These numbers refer to announced job cuts; not all have been implemented yet.)

Federal cuts are proportionally smaller, with 4200 jobs going in 2012-13 — but the Coalition has pledged to make a further 12,000 bureaucrats redundant over two years if it wins the election, due next year.

Governments say almost all positions have been vacated through natural attrition, non-renewal of contracts and voluntary redundancies. Experts predict some cuts will not be voluntary in the future.

Premiers say they are culling jobs to master deficits in tough financial times; bureaucracies are bloated and must make do with less. Whelan rejects the austerity argument, saying Australia has a low national net debt and sacking public servants won’t stimulate the economy anyway.

Whelan says Australia underinvests in its public service compared to OECD countries, and shrinking the bureaucracy affects government services, program delivery, policy advice, and financial management. He sees it as a counterproductive move stemming from an ideological desire to scale back government — and bureaucrats make an easy target because of the misconception that they don’t do much.

“We’ve probably become a little accustomed to public service bashing,” Whelan said. “It’s like the public sector has few outspoken allies or advocates. To the extent that that’s true, the public sector is vulnerable.”

Geoff Gallop, director of the University of Sydney’s graduate school of government (and former WA premier) says the public service boosts economic development, and cites the importance of having enough departmental staff in the early days of the West’s China-led resources boom. Gallop cautions premiers to think twice about slashing public expenditure as the prospect looms of a Europe-led GFC mark 2.

“It’s just too easy to say ‘let’s cut the public sector’. We need a more sophisticated discussion; we’re not getting it. They’re just slashing, and I don’t think that’s a very sophisticated way to proceed,” Gallop told Crikey.

Unions, perhaps sensitive to a lack of public sympathy for the country’s 1.9 million bureaucrats, are focusing on the impact on services. Commonwealth Public Service Union national secretary Nadine Flood warns there will be longer waits for services and payments; Centrelink call centres are taking up to 90 minutes to pick up — there are reports of some clients falling asleep on the phone — and the baby bonus can take 70 days to process.

Flood says about 75% of federal staff losses are through attrition, with the rest voluntary redundancies. There have been some forced redundancies at state levels.

“It is a tough time to be a public servant. There is a real fear amongst many areas of our membership about what their future holds,” Flood told Crikey.

The union is worried about jobs in regional areas like Geelong, Wollongong, Hobart, Launceston, Wagga Wagga and regional Queensland. Cuts to specialist areas like the CSIRO is leading to a brain drain overseas.

And unions are gearing up for a fight with the Coalition if it wins the federal election. Flood notes that for the Coalition to balance its books and deliver its promises — scrapping the mining and carbon taxes, posting larger budget surpluses than Labor, etc — it would have to sack more than the 12,000 public servants Joe Hockey talks about.

So how much fat was there to cut? Stephen Bartos, an expert in public policy and governance (and executive director at ACIL Tasman) says the cuts are not necessarily a bad thing. But he concedes public servants get a raw deal when compared to the fuss made of cuts to the automotive and defence manufacturing sectors.

“It generally comes down to a political calculus; if you’re a manufacturing plant in a marginal seat you’re a bit more likely to find yourself getting government assistance. Public sector cuts? Bit different,” Bartos told Crikey. “There is a degree of taxpayer resentment of the public service.”

However, Bartos points out that premiers like Newman have a mandate to shrink the bureaucracy. He says that from time to time the public service needs a clean-out. He cites NSW, where he says the bureaucracy does not currently have a strong reputation for competence.

“There’s a demonstrable need for change,” he said. “These [job cuts] aren’t always bad things … it’s not all negative.”

Bartos points to the concept of “creative destruction” — where some industries have to shrink or die in order to allow new, innovative industries to boom, as part of the inexorable march of capitalism. (The concept does not seem to have been applied in any great rigour to cars or aluminium, mind you.)

And Bartos says with national unemployment sitting just over 5%, many bureaucrats will find new jobs. They are well-trained in skills needed in the services industries — IT and communications skills are in high demand, including in regional areas. And there is an increasing amount of movement between the public, private and not-for-profit sectors — that can be a good thing, according to Bartos.

“The days in which the public service was a career for life are probably gone,” he said.

Bartos may be putting on a brave face but he is concerned about the loss of the most capable and employable bureaucrats — who are often first in line for redundancies — and the ensuing loss of talent and corporate memory. A new generation of managers may not know how to handle job losses while managing morale.

Opinions may differ as to the wisdom of culling 38,000 public service jobs (with another 24,000 on the line), but Crikey’s experts agreed on one thing: cuts on this scale are very significant and there should be a full and informed debate about whether the cuts are needed, and the trade-offs that are being made in terms of services and capacity. And the debate should go beyond “public service bashing”.

Where the axe has fallen

AUSTRALIAN PUBLIC SERVICE, FEDERAL PUBLIC SERVICE

A Crikey analysis has found 38,000 public service job cuts have been announced at the federal and state levels over the past few years. A further 24,000 positions are on the line (the federal Coalition says it will cull 12,000 positions, while the Queensland government has hinted at a possible further 12,000-20,000 job losses).

Here’s where the axe has fallen …

Federal government: Job cuts of 4228 announced in 2012-13 budget, to take effect this financial year (this does not include an additional 1154 jobs for Defence military and reservists, because they are not public servants). Largest cuts are to Treasury, Attorney-General’s, and Human Services.

Joe Hockey has said if the Coalition wins government it would make 12,000 public servants redundant over two years. Hockey noted there were 20,000 more federal public servants now than there were in 2007; unions expect the Coalition to sack more than 12,000.

Total: 4228 full-time equivalent jobs to be cut, rising to 16,000 if the Coalition wins.

New South Wales: Some 5000 voluntary redundancies announced in September 2011 (O’Farrell government).

Additionally, the 2012-13 budget set a 1.2% per annum reduction in labour costs across the public service, which unions say equates to 10,000 jobs. The government says nurses, police officers and school teachers will be quarantined, and concedes there is no cap on the number of jobs to go, so it could be higher than 10,000.

The Labor opposition says Treasury documents show 3600 jobs will be cut from hospitals and 2400 from schools and TAFEs over the next four years.

Total: 15,000 FTE job cuts announced since 2011; that may rise.

Queensland: In May 2011 the former Labor government announced 3500 voluntary redundancies over three years, extending the program in early 2012 to cover an extra 1500 positions. (An estimated 4500 jobs were cut as a result.)

Additionally, Premier Campbell Newman has said about 3000 jobs have been cut recently (most from non-renewal of temporary contracts). About 2000 jobs are to go from Queensland Rail. More cuts are expected in the September budget; Newman has said the state is employing 20,000 more public servants than it can afford, and significant extra cuts can be implemented without reducing services. (It’s not clear whether Newman’s 20,000 figure includes jobs already cut.)

Total: at least 7500 FTE cuts announced since 2011; more expected.

South Australia: Some 1000 FTE were cut in the 2012-13 budget (cuts to take effect over three years from 2013-14, through voluntary redundancies and natural attrition). This comes on top of 400 jobs cut in the 2011 budget, and 3750 jobs cut in the 2010 budget.

Total: 5150 FTE cuts announced since 2010.

Victoria: In December 2011 the government cut 3600 jobs; a further 600 cuts were announced in the 2012 budget. So far, jobs have been cut through attrition and non-renewal of contracts. The government recently announced the number of positions to be cut from each department.

Union sources say the Vertigan Review into state finances recommends cuts of up to 7000 (including jobs already cut).

Total: 4200 FTE cuts announced since 2011.

Tasmania: The 2012-13 budget said 1098 FTE jobs had already been cut. The Health Services Union said the budget indicated another 800 jobs would be cut. Labor says it has quarantined health, police and education.

Total: 1898 FTE cuts announced since 2011.

Northern Territory: The CSPU says the 2012-13 budget cut $300 million from the public service, with agency budgets cut by between 0.75% and 3%.

Western Australia: Does not appear to be cutting the public service, although there are reports some agencies do not fill their FTEs.