Victoria: Public service hiring freeze pitched to help budget fix
A would-be premier has gone some of the way to answering how she plans to embark on state budget repair while simultaneously promising to slash five taxes.
A 10-year public service hiring freeze is being pitched to rein in a state’s ballooning wages bill and return the budget to cash surplus.
In her first substantive reply to Tuesday’s Victorian budget, Opposition Leader and shadow treasurer Jess Wilson on Friday will unveil a policy to reduce the state’s public service staff levels from 2027 to 2037.
Under the hiring freeze, the public service would lose 7184 full-time equivalent staff over the first two and a half years of a coalition government.
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By continuing you agree to our Terms and Privacy Policy.It would target back-office roles across 46 Victorian government departments and agencies and is expected to save $22 billion over the 10-year span.
Ms Wilson said the savings would be achieved through natural attrition and vowed there would be no job cuts to police, nurse, teachers, healthcare workers, firefighters and other essential services.
“Rightsizing back-office public service roles is a difficult, but necessary measure I am willing to take to guarantee essential services and repair Victoria’s finances,” she said.
In response to the Silver review, Treasurer Jaclyn Symes committed to cut more than 1000 public service jobs and merge or abolish 29 government entities and boards to save more than $4 billion across the next four years.
But the budget papers show employee expenses are still expected to rise from $41.1 billion this financial year to $45.5 billion in 2029/30.
Victoria is on track to accrue $199.3 billion in net debt by mid-2030, sending interest repayments soaring above $32 million a day.
Treasury has forecast modest operating surpluses in each year over the forward estimates but cash deficits of more than $30 billion once spending on infrastructure projects is factored in.
In her speech, Ms Willson will vow to deliver a cash surplus by 2032, adding to her previous commitments to slash five taxes if the coalition comes to government in November.
“My Liberal and Nationals team did not create the financial mess Victoria is in, but we have a clear, measured and responsible plan to fix it,” she said.
Three credit rating agencies class Victoria’s economic outlook as stable.
But updated analysis from Moody’s estimated a one per cent increase in interest rates above budget forecasts would raise net debt by $1.6 billion by 2030, swallowing up another 0.3 per cent of revenue on average each year.
“Victoria’s still-weak fiscal position means that higher interest rates or weaker expenditure control would compound pressures on the debt burden and debt affordability, further testing the state’s capacity to absorb future shocks,” it said.
