In the lead-up to Tuesday’s federal budget, Finance Minister Katy Gallagher has announced that the Australian government has secured an additional $2.1 billion in savings. This brings the total amount of budget savings and “reprioritised” spending under the Labor government to nearly $95 billion during its current term.
A significant portion of the savings, $720 million, comes from cuts to consultants, contractors, and labor hire, part of the ongoing effort to rebuild the capacity of the public service. Since 2022, the government has saved a total of $4.7 billion by reducing its reliance on external labor.
Gallagher’s office has not disclosed the exact sources of the remaining $1.4 billion in savings for this year’s budget. The minister emphasized that these savings reflect the government’s efforts to balance the budget and prioritize public spending on services that matter to Australians.
Gallagher contrasted Labor’s approach with that of the opposition, led by Peter Dutton. The Coalition has proposed cutting public service positions and mandating a return-to-office policy for federal workers if it wins the next election. Gallagher highlighted the stark choice between Labor’s focus on repairing the budget to fund essential services, and the Coalition’s plans to slash frontline services to fund their ambitious $600 billion nuclear defense plan.
The Coalition has criticized the 36,000 additional public service positions created under the Albanese government. Shadow Finance Minister Jane Hume argued that these new positions have not led to improved services, but rather an expanded and bloated public service. Hume suggested that if the Coalition wins, these positions would be eliminated, but she also promised to protect frontline worker roles.
On the topic of returning public servants to the office, the Labor government has sharply criticized the Coalition’s stance. Prime Minister Anthony Albanese pointed out the benefits of remote work, including reduced commuting time and cost savings, particularly for workers in remote areas. Labor’s position is that mandatory office returns would increase costs for workers and negatively affect productivity.
The Australian Council of Trade Unions (ACTU) has also weighed in, claiming that the Coalition’s proposed return-to-office policy would disproportionately impact women, particularly those who benefit from flexible working arrangements. ACTU President Michele O’Neil described such policies as “productivity killers” and argued that they would reverse recent gains in women’s workforce participation.
As the federal budget is set to be unveiled, the debate continues on the balance between managing the budget, maintaining public services, and supporting flexible working arrangements for Australians.
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