Finance and Public Service Minister Katy Gallagher's former union has fired a warning shot at the Albanese government over expected public sector cuts in the May federal budget.
As public servants brace for bad news and as redundancies begin, the Community and Public Sector Union (CPSU) said Labor should be safeguarding jobs after promising to restore APS capacity.
"People working in the public service aren't just worried about cuts, they're witnessing them," CPSU national secretary Melissa Donnelly told The Canberra Times.
"We're losing trained and trusted public sector workers in the name of budget savings, while big consulting and labour hire firms are still cashing in."
The CPSU urged the government in its pre-budget submission to focus on "the substantial savings available through insourcing work currently outsourced to private, for-profit providers," noting that many agencies were failing to meet targets to reduce the use of contractors, consultants and labour hire under Labor's Strategic Commissioning Framework."Reports of agencies preparing for cuts or staffing freezes are alarming when the APS rebuild remains incomplete," it said.
The Australian Public Service Commission revealed in December that more than a third (36 per cent) of agencies either only partly met, or did meet their targets.
The framework was a key plank of Labor's pre-election commitment to reduce expenditure on external APS work, as well as non-labour expenses like travel, hospitality and property services, by $6.4 billion over four years, including bringing $527 million worth of core work in house in 2024-25.
Ms Donnelly said agencies and the government "are both responsible for the slow progress on insourcing that we are seeing, and now that's coming at a real cost".
"We need to see more ambition and more accountability for the agencies who just aren't taking this seriously."
Treasurer Jim Chalmers said on Sunday that he wanted to deliver an "ambitious" budget in May, but that the length and intensity of the Iran conflict would determine how difficult this would be, saying there was "extraordinary volatility" in Treasury's economic forecasting.
The budget also has to contend with higher labour costs in the APS after enterprise bargaining pay rises, with another round on the horizon.
The Finance Department directed agency heads in November to identify their 5 per cent lowest priority spending.
Senator Gallagher, who was a union organiser with the CPSU before entering politics, said at the time that the government was "not looking to reduce ASL [average staffing levels]".
But Ms Donnelly said if the reduction in agency spending was "not meant to be about cutting staff, then the government shouldn't have a problem with stepping in and directing agencies not to cut APS jobs to make that saving".
A spokesperson said the government remained committed to bringing core public service work back in-house, "where it delivers better value" and that progress against targets would continue to be publicly reported.
"Agencies are expected to meet the government's strategic commissioning targets and to prioritise insourcing core work where it makes sense," the spokesperson said.
The government "has made significant progress in rebuilding public sector capability and reducing reliance on external labour," the statement said.
"The focus now is on ensuring the APS has the right skills and capacity to deliver on government priorities and the services Australians rely on."
The CPSU submission said the government's "stated support to insource public service work should be backed by action, including taking a stronger position on the continued reliance on third-party contractors" by the Department of Employment and Workplace Relations and the Australian Tax Office, which still outsources call centre operations.
It also pointed to the Bureau of Meteorology's website rebuild, which was largely contracted to Accenture, the cost of which blew out from $4 million to almost $100 million and was years overdue.
Ms Donnelly said "funding cliffs" from previous budget measures due to expire on June 30 - which include 4241 Services Australia jobs not funded beyond then - threatened progress to "rebuild public sector capacity" and damage public trust in services.
"Arbitrary savings targets will only cost jobs, degrade services, and hinder the Commonwealth's ability to meet its commitments."
The government spokesperson said decisions on terminating measures "are taken as part of the normal budget process and are announced as part of the budget".
