Public sector staffing reductions in the states and territories

Posted 12/09/2012 by Nicholas Horne

Since 2011 the state and territory governments have introduced public sector staffing reductions as savings measures (some jurisdictions also had reduction programs in place prior to 2011). A summary of the reductions is provided below; ‘FTE’ is not a headcount but refers to full-time equivalent staffing levels.

For the Commonwealth Government, the 2012–13 Budget estimates a staffing reduction in the Australian Public Service of 3 074 FTE for 2012–13 to be achieved in the main by a combination of natural attrition and voluntary redundancies. In November 2011 the Government also increasedits efficiency dividend rate to 4.0 per cent for 2012–13 (up from a rate of 1.5 per cent per annum).

In 2011 and 2012 the Queensland, Victorian, New South Wales and Northern Territory Governments commissioned independent reviews of public sector finances, expenditure and management. The federal Leader of the Opposition has stated that a Coalition government will establish a commission of audit to review Commonwealth Government operations.


New South Wales

In its 2011–12 Budget the NSW Government introduced a voluntary redundancy program with a staffing reduction target of 5 000 positions over 2011–15, mainly in non-service delivery areas; further reductions through turnover and natural attrition were also envisaged. The 2012–13 Budget has introduced a whole-of-government labour expense cap with a target reduction in labour spending equating to 1.2 per cent per annum over 2012–16. The Government has not imposed a methodology on agencies for implementing the cap but has noted that implementing the cap exclusively through staffing reductions would equate to some 10 000 positions over four years. Teachers, police and nurses have been exempted from the labour expense cap.

The 2012–13 Budget also states that, as at April 2012, the voluntary redundancy program introduced in the 2011–12 Budget had resulted in 2 032 voluntary redundancies either in place or announced.

The 2011–12 Budget maintained the efficiency dividend rate set by the previous ALP Government (1.5 per cent per annum over 2011–13), and specified an additional efficiency dividend savings target of $150 million for 2014–15; the 2012–13 Budget extends the application of the efficiency dividend to 2015–16. The efficiency dividend was introduced in 2005–06.

Victoria

In December 2011 the Victorian Government introduced a public service staffing reduction of some 3 600 non-service delivery positions over 2012–15 to be achieved through voluntary redundancies and the non-renewal of fixed term contracts. Staff in essential service delivery areas—for example teachers, police, nurses and childcare workers—were exempted from the reduction. The Government also stated that it would reduce its employment of contractors and consultants.

In March 2012 the Government establisheda Better Services Implementation Taskforce to oversee the implementation of reforms to the public service including the staffing reductions.

In its 2012–13 Budget the Government has introduced a further staffing reduction of some 600 positions resulting from savings to be made in individual program areas. In June 2012 the Government indicatedthat since December 2011 public service staffing had been reduced by 910 positions through attrition and non-renewal of contracts, and in September 2012 the Government stated that 2 600 voluntary redundancies had been applied for.
 
Queensland

In its 2011–12 Budget the previous Qld ALP Government introduced a voluntary separation scheme for non-frontline public service positions estimated to reduce staffing by 3 500 positions over 2011–13; in January 2012 this target was increased to 4 500 positions.

In its 2012–13 Budget the LNP Government has introduced an overall staffing reduction target of 14 000 FTE for 2012–13, with 10 600 FTE to be shed through redundancies and the remainder through natural attrition and the cessation of temporary positions. The reduction target includes the previous voluntary separation scheme; individual reduction targets are specified for agencies.

Prior to the 2012–13 Budget the LNP Government had foreshadowed public service staffing reductions, with Premier Newman expressing the view that the Qld Government employed 20 000 more staff than it can fund and that tough decisions would be necessary. In July 2012 the Premier also noted public service reductions of around 4 400 FTE between April and July 2012; prior to the 2012–13 Budget staffing reductions were reported in the media across a number of agencies. In mid–2012 the LNP Government establisheda Public Sector Renewal Program to review agencies and identify savings within the public service.

In the 2011–12 Budget the former ALP Government increased its cross-agency efficiency dividend savings target by $162 million over 2013–15 (up from a base target of $338 million). The efficiency dividend (termed a ‘productivity dividend’) was introduced in 2008–09.

Western Australia

In 2011 the WA Government introduced a voluntary redundancy program with a staffing reduction target of 400 positions in 2011; previous voluntary redundancy programs had been announced in 2010 and 2009.

In its 2012–13 Budget the Government has introduced a ceiling on FTE staffing levels over 2012–14 to be set at 2011–12 levels with some exceptions for particular areas, together with limitations on FTE growth from 2014–15. The Budget also states that the previous voluntary redundancy programs have resulted in staffing reductions of 1 138 positions.

The 2012–13 Budget also continues the application of the Government’s efficiency dividend for 2012–13 at differential per annum rates depending on agency with cumulative annual increases over 2013–16. The efficiency dividend was introducedin 2008–09.

South Australia

In its 2011–12 and 2012–13 Budgets the SA Government introduced new staffing reductions of 1 400 FTE over 2012–16 (400 non-frontline FTE over 2012–14 in the 2011–12 Budgetand 1 000 FTE over 2013–16 in the 2012–13 Budget). The 1 000 FTE reduction specified in the 2012–13 Budget will be achieved by voluntary separations and natural attrition. Previously, staffing reductions of 1 762 FTE had been announced in the 2010–11 Budget and prior.

The 2012–13 Budget also increases the Government’s efficiency dividend rate to 1.0 per cent per annum over 2013–16 (up from a base rate of 0.25 per cent per annum). The efficiency dividend was introducedin the 2006–07 Budget.

Tasmania

In February 2011 the Tasmanian Government announced a public sector productivity strategy and savings program involving potential public sector staffing reductions of up to 2 300 FTE over 2011–15. In May 2011 the Government indicatedthat staffing reductions would be achieved by a combination of means including vacancy management, voluntary redundancies, and involuntary redundancies as a last resort; the 2011–12 Budgetrevised potential reductions to around 1 700 FTE.

In August 2012 the Government stated that staffing reductions of around 945 FTE had occurred over 2011–12 since the 2011–12 Budget. The 2012–13 Budgetdoes not specify any further staffing reductions.

The 2012–13 Budget also sets out additional savings targets for selected agencies over 2012–15 at differential per annum rates depending on agency.

Northern Territory

In its 2010–11 Budget the NT Government introduced a staffing cap on public sector staffing levels over 2010–12 (staffing reductions were not required). The 2012–13 Budget continuesthe staffing cap for 2012–13.

Following the August 2012 NT election Chief Minister Mills stated that there would be no public service job losses under the new CLP Government but flaggedpossible staffing reductions through natural attrition. The CLP Government has also imposed a freeze on public sector recruitment with the exception of approved positions and identified frontline positions.

The 2012–13 Budget also increases the Government’s efficiency dividend to 3.0 per cent for 2012–13 (up from a base rate of 1.0 per cent per annum). An efficiency dividend has been in place since at least 2007–08.

Australian Capital Territory

The 2012–13 ACT Government Budget specifies a public service staffing reduction target of approximately 180 FTE for 2012–13 to be achieved through natural attrition, reduced contractor expenditure and some voluntary redundancies.

An efficiency dividend at differential per annum rates according to agency appropriation levels was introducedin the 2009–10 Budget (for commencement in 2010) and was reapplied in the 2010–11 and 2011–12Budgets with cumulative annual rate increases over 2012–14. The 2012–13 Budget does not specify any increase in the efficiency dividend but does announce the establishment of an advisory group to assist the Government on public sector reform including savings measures.

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