The Labor Government’s implementation of the Review and actions to reform the Victorian public sector will create more than $4 billion in savings, ensuring government spending is focused on what matters most to Victorians.
The government is:
- continuing disciplined and responsible fiscal management
- rebalancing the public service following the pandemic
- reforming government entities to remove duplication and boost productivity
- continuing advocacy for Victoria’s fair share of Commonwealth funding
- focusing the public sector on what matters most and providing the frontline services Victorians deserve.
Disciplined and responsible fiscal management
The Victorian Labor Government has set out its fiscal strategy to restore the budget after the COVID-19 pandemic, and it is working.
The government is growing our state’s economy and reducing debt as a share of the economy, while continuing to deliver the services and infrastructure Victorians rely on.
We will deliver an operating surplus and will be the first government on the eastern seaboard to achieve this in 2025‑26.
Rebalancing the public service following the pandemic
The government will reduce executive and executive-like roles by 332 across the public service, which the Review estimates will save $359 million from 2025–26 and over the forward estimates.
We will also rebalance the proportion of senior VPS5 and VPS6 positions, estimated by the Review to save $125 million over the forward estimates. This will help to return the public service to its pre‑pandemic profile and create opportunities for more junior and graduate positions.
The government will also further reduce consultants and labour hire contractor expenditure by 10%. While the Review noted that spending on consultants and labour hire contractors has declined to below pre-pandemic levels, the government will deliver further savings of $113 million over the forward estimates.
Reforming government entities to remove duplication and focus on excellence in service delivery
Building on the Economic Growth Statement and the work already underway to cut the number of business regulators by half, the government will now streamline and further reduce the number of government entities.
This is to be achieved by merging entities with similar functions, returning functions to government departments, or by winding down entities that are no longer required.
These activities will bring about further red tape reduction and make it easier for businesses and the public to navigate government. Specifically, the government will:
- establish Safe Food Victoria to replace the complex mix of Dairy Food Safety Victoria, PrimeSafe, Department of Health, and local councils
- create the Business and Professions Regulator, by expanding the role of the Business Licensing Authority to cover architects, surveyors, and veterinarians
- merge the Victorian Legal Services Board and Legal Admissions Board
- absorb HealthShare Victoria and VicHealth into the Department of Health
- absorb the Health Complaints Commissioner into Safer Care Victoria
- absorb the functions of Recycling Victoria into the Environment Protection Authority.
Earlier this year, the new Building and Plumbing Commission brought together the Victorian Building Authority, Domestic Building Dispute Resolution Victoria, and building insurance functions.
By halving the number of business regulators by 2030, Victoria will have the lowest number of business regulators of any state.
Advocating for Victoria’s fair share of Commonwealth funding
The Review highlights that Victoria’s share of Commonwealth Government funding relative to its population share has been consistently below that of other large states.
Victoria has received $31 billion less than its population share since the GST was introduced and Victoria has received $9.4 billion less than its population share in infrastructure funding over the past 10 years.
The Victorian Government will continue to advocate for better funding for Victoria, and work with the Commonwealth to find ways to address this imbalance.
Providing frontline services for Victorians
The Review notes that, to address service gaps, Victoria has made decisions to fund services that are traditionally delivered by the private sector or are the responsibility of the Commonwealth. We will always ensure Victorians can access the high-quality services they need, and we make no apology for stepping up. These services are important and that is why the government is not adopting some recommendations made by the Review. The government stands by its commitment to not cut frontline services.
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