Victoria to Scrap 1,000 Public Sector Jobs, Consolidate Agencies to Cut Costs

The Victorian government will abolish more than 1,000 public service roles and consolidate dozens of government entities under a cost-cutting plan aimed at saving $4 billion (US$2.6 billion) and slowing the state’s fast-rising debt.

Premier Jacinta Allan said the changes were designed to keep the public sector “laser focused” while avoiding cuts to frontline services.

“There are no cuts to frontline services in the $4 billion savings we have committed to,” she said, adding the government needed discipline to “drive down debt” and ensure the state’s economy continued to grow.

The announcement accompanied the release of the final report (pdf) by Helen Silver, the senior bureaucrat tasked earlier this year with identifying inefficiencies across Victoria’s sprawling public sector.

Treasurer Jaclyn Symes confirmed the government will cut about 332 senior executive and technical specialist roles, delivering an estimated $359 million in savings over four years.

Further reductions to VPS5 and VPS6 staffing levels are expected to save another $125 million.

Altogether, the government forecasts more than 1,000 roles will disappear—far fewer than the 2,000 to 3,000 cuts Symes flagged when commissioning the review in February.

Spending on consultants will also be pared back, with projected savings of $113 million.

The cuts come amid a decade-long surge in public service costs, which have risen from $18.8 billion in 2014–15 to $38 billion in 2024–25.

In June 2024, Victoria employed roughly 315,000 full-time equivalent public sector staff, representing around 10 percent of the state’s workforce.

Entity Overhaul Falls Short

Of the review’s 52 recommendations, the government accepted 27 in full, three in part, 15 in principle, and rejected seven.

One of findings was the scale of Victoria’s public sector, with more than 500 entities and 3,400 boards, with many found to have overlapping roles or adding unnecessary complexity to service delivery.

The review recommended cutting 78 entities and winding up 90 advisory committees, which would deliver an estimated $427 million in savings and remove 536 full-time roles.

The government, however, adopted only 29 entity reductions—a fraction of what was proposed.

These include halving the number of business regulators by 2030, merging dairy and meat regulators, merging the Victorian Legal Services Board with the Legal Admissions Board, and absorbing HealthShare Victoria and VicHealth into the Department of Health.

Rejected recommendations include a pause on expanding early learning and childcare centres and cutting funding for musical instruments in secondary schools. The government also declined to merge the state’s retail water authorities despite recent billing failures.

Debt Pressure Mounts

The Silver Review warns that debt is now constraining Victoria’s budget flexibility and risks undermining the state’s long-term policy ambitions.

“Debt is creating inflexibility in the state’s budget and will constrain the government’s ability to deliver on its policy goals unless strong fiscal discipline is maintained,” the report stated.

The Victorian auditor-general’s office also delivered a stark assessment in a report released on Nov. 24.

Key findings include:

• $50.6 billion in public sector deficits accumulated over the past six years
• A $2.6 billion operating loss in 2025—an improvement on last year but still worse than expected
• Operating expenses rising $6.7 billion, driven by staffing and interest costs
• Gross debt increasing from $168.8 billion to $187.9 billion, projected to hit $236.6 billion by 2029
• Net debt already at 23.7 percent of the economy and forecast to reach 24.9 percent by 2029

The report noted debt growth had “consistently outpaced revenue and economic growth” for a decade—a trend that is expected to continue.

To stabilise Victoria’s finances, the auditor-general said the government must deliver at least $6.3 billion in planned savings over the next four years.

Opposition Criticises ‘Bureaucratic Bloat’

Victoria’s Opposition says the Silver Review confirms the Labor government is presiding over an oversized, inefficient public service that is “wasting billions.”

The Opposition claimed reductions barely scratch the surface of years of unchecked growth, with leader Jess Wilson saying the review amounted to a concession that Labor’s fiscal management had faltered.

“Labor’s Silver Review is a $4 billion admission of failure,” she said.

“This report issues a stark warning over the dire impact Victoria’s soon-to-be $1 million an hour interest bill is having on our capacity to deliver frontline services now and into the future.”

Wilson argued this pattern mirrors past commitments that were never met. As part of its COVID debt plan, the government pledged to reduce VPS staffing by 3,000–4,000 roles in 2023–24. Instead, numbers fell by just 1,435.9 FTE—less than half the minimum target.

Monica O’ Shea contributed to this article.