A sweeping independent review has recommended a major overhaul of the Victorian public sector, calling for significant staff reductions to improve efficiency and create budget capacity
The final report of the Independent Review of the Victorian Public Service (VPS), led by Helen Silver, identifies savings of nearly $5 billion over four years. Central to these savings is a plan to reduce the public sector workforce by more than 2,000 full-time equivalent (FTE) positions.
The report, delivered to Treasurer Jaclyn Symes, argues the public service has become "top-heavy" since the pandemic, with growth concentrated in senior roles. It calls for a fundamental reset to streamline bureaucracy, consolidate hundreds of public entities, and accelerate digital transformation.
Key findings on workforce and job reductions:
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Cutting senior executive roles: The review recommends an immediate reduction of 332 senior executive service (SES) and senior technical specialist (STS) roles across government departments and some large entities. This aims to return executive-to-staff ratios to pre-2019 levels.
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Rebalancing and reducing mid-tier roles: A further reduction of VPS5 and VPS6 positions is proposed, to be redistributed towards more junior classifications over four years. This restructuring, while not a net reduction in overall FTE, is projected to deliver salary savings of $125 million.
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Public entity consolidation: A major consolidation of Victoria's "unwieldy" landscape of over 500 public entities is a cornerstone of the plan. The review recommends abolishing or merging 78 entities and ceasing up to 90 advisory committees. This reform package alone is expected to cut 536 ongoing FTE positions.
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Digital transformation savings: Accelerating the shift to digital platforms and shared services, alongside the adoption of artificial intelligence, is forecast to reduce staffing by a further 197 FTE.
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Portfolio-specific cuts: The report identifies additional savings of $1.2 billion from specific program reforms, leading to another 384 FTE reductions. This includes pausing the rollout of state-built early learning and childcare centres, consolidating industry support functions, and ceasing programs like the Doctors in Secondary Schools initiative and COVID-19 special leave for health workers.
Impact and rationale:
When combined with $2.8 billion in savings and 619 FTE cuts already endorsed from the review's interim advice for the 2025/26 Budget, the total recommended impact exceeds 2,000 positions.
"The intent is to assist the government, VPS and public sector to be for fit for purpose and equipped for the future, so that it can continue delivering high-quality core services for all Victorians, at the most efficient price," said Silver.
She emphasised the need to do fewer things and do them better.
The report criticises the current structure as "costly," slowing decisions and stifling innovation. It calls for removing excessive management layers and empowering more junior staff.
Implementation and next steps:
The government must now decide which recommendations to adopt. The review urges "immediate" and "focused" implementation, warning that delay will increase uncertainty.
It recommends establishing a dedicated delivery unit within the Department of Treasury and Finance to oversee the changes and calls for "strong and considerate leadership" to manage the process.
