Key facts
- Officials said voluntary redundancies totaled $70.5 million for 713 people, an average of $98,878 per role.
- Home Affairs accounted for the largest share of redundancy spending at $74.9 million.
- Agencies saved $34 million on consultants and contractors compared with 2024-25.
- Gallagher's spokesperson said agency budgets had been reduced by $14.8 billion through 2029-30.
- Agency heads must fund an 11.2% pay rise between 2023 and 2026 from existing budgets.
Australian government agencies paid $70.5 million in voluntary redundancies to 713 people in the last financial year, an average of $98,878 per role, while collectively saving $34 million on consultants and contractors compared with 2024-25, officials told a Senate estimates hearing.
Home Affairs accounted for the largest share of the redundancy spending at $74.9 million, according to the figures given at the hearing.
The savings were partly attributed to the Strategic Commissioning Framework, which was intended to reduce outsourcing and bring several billion dollars of work in-house. Agriculture, Social Services and Employment recorded savings, offset by increases at the climate change department and the Tax Office.
Treasurer Jim Chalmers and Finance Minister Katy Gallagher acknowledged there was "more work to do" to find savings as the government prepares its Mid-Year Economic and Fiscal Outlook, due in December. A spokesperson for Gallagher said the government had already reduced agency budgets by $14.8 billion across the Australian Public Service and would keep looking for ways to cut expenditure. The $14.8 billion is to be drawn from agency budgets through 2029-30 but does not specifically bar spending on consultants and contractors.
Agency heads have been managing budget constraints alongside an 11.2% pay rise between 2023 and 2026 funded from existing budgets. The next pay offer, still under negotiation, is likely to be at least 9% over three years.