Independent Review of the Victorian Public Service

The Review found the Government’s fiscal management and strategy are sound but could be enhanced to help create more operating budget capacity and opportunities to focus on base funding; proposing a set of financial management principles to help improve financial insights and management.

The Review identified that Victoria’s historical share of Commonwealth government funding relative to its population share has been consistently below that of other large states and recommends a renewed Commonwealth-State relations approach, active pursuit of improved data sharing arrangements, and transitioning out of duplicative service provision.

The Review recognised that the VPS is a capable and dedicated workforce but found that departments’ management structures need systematic streamlining to ensure resources are utilised in the most efficient and effective way.

The Review recommends resetting the size and structure of the VPS, starting with a disciplined model of increased spans of control and reduced layers of hierarchy, using the management ratios from 2019 and a model structure of spans and layers.

The Review highlighted that Victoria’s numerous public entities, boards and advisory committees come at a substantial direct and indirect cost.

The Review outlines opportunities to reduce and streamline public entities, boards, and advisory committees through carefully targeted cessation, merging and streamlining.

The Review recommends a staged reform model to digitise repeatable transactional services across customer services, regulatory functions, corporate services and enabling infrastructure.

In time, these changes could better meet service demand, save money, improve productivity, and improve the quality of services to the community.

The Review recommends reforms to realise ongoing savings across portfolios by reducing duplication and improving effectiveness of expenditure.

The Review recommends oversight be provided through the Victorian Secretaries’ Board.

The Victorian Government welcomes the Review’s recognition of its commitment to responsible financial management and the progress of its fiscal strategy to date. The government is taking further steps to reinforce its strong financial decision-making framework.

The Review concluded that the public service has become ‘top-heavy’ in recent years, with a disproportionate growth of senior roles as a proportion of the total workforce.

It recommends rebalancing the workforce to reduce the proportion of senior roles and levels of hierarchy while granting greater autonomy to employees at middle levels and creating more entry-level roles. Frontline workers, such as nurses, teachers and police officers, were not included in the Review and will not be affected by these changes.

While the Review notes that spending on consultants and contractors is now less than before, the government will further reduce spending on consultants and labour hire contractors to retain expertise in the public sector.

The Review identifies that a range of public entities and boards that once served an important purpose are no longer needed as there are more effective ways to meet the needs of the community.

By accepting many of the Review’s recommendations to merge bodies with similar functions, return functions to core government departments, or wind down bodies that have achieved their policy goals, the government will reduce the number of public entities and the number of regulators – making it easier for people and businesses to interact with government.

The Review highlighted that Victoria’s historical share of Commonwealth funding relative to its population share has been consistently below that of other large states.

The government will continue to:

• advocate for the Commonwealth to find ways to address this funding imbalance
• seek a fair GST system that does not leave Victoria and other states worse off, while WA receives all the benefits
• advocate for better data sharing arrangements with the Commonwealth to support improved targeting of concessions and other supports.

The Victorian Government is committed to focusing the public sector on what matters most, ensuring that the services Victorians rely on are delivered efficiently and on a sustainable basis.

Ongoing reforms will touch on major government programs, how the public sector can improve delivery of services and a pathway to harness digital technology to boost productivity.

The Victorian Secretaries’ Board will oversee implementation of the Government strategy, as recommended by the Review. The Board’s monitoring role will be supported by the Department of Premier and Cabinet and the Department of Treasury and Finance.

Implementation will commence immediately.

Earlier this year, the Victorian Government commissioned an independent review to zero in on waste and inefficiency, with a focus on returning the non-frontline public sector towards its pre-pandemic share of employment.

The Review, led by Helen Silver AO, was asked to:

• help ensure spending is focused on supporting Victorians with the cost of living and ensuring that families have access to the essential services they need in health, housing, education, transport and community safety
• zero in on waste and inefficiency, with a focus on returning the non-frontline public sector towards its pre-pandemic share of employment.

In making recommendations, the Review has considered the role of the government, overlapping responsibilities, and opportunities to enhance service delivery effectiveness and efficiency.

The Victorian Government is making sure the public sector is focused on Victorians and their priorities: good schools, good hospitals, safe communities – and helping families with the cost of living.

The Victorian Government will be implementing the majority of the Review’s recommendations, and as a result will deliver over $4 billion of savings.

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 service on what matters most and providing the frontline services Victorians deserve.

Not every recommendation in the Silver Review has been accepted.

The Victorian Government has been clear that there will be no cuts to the frontline services that families rely on. That’s why recommendations affecting frontline services including childcare centres, TAFEs, and dental care for children were not accepted.

The government will:

• reduce executive and similar roles by 332 across the public service, which the Review estimates will save $359 million over the forward estimates
• reduce the proportion of senior VPS5 and VPS6 positions, estimated by the Review to save $125 million over the forward estimates.

The VPS workforce will be rebalanced through careful workforce planning, natural attrition and include staff consultation.

Any changes will be undertaken in accordance with obligations under the relevant EBA and will include consultation with staff and unions.

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.

Building on the Economic Growth Statement and the work already underway to cut the number of business regulators by half, the government will streamline and further reduce the number of government entities by 29.

This is to be achieved by merging entities with similar functions, returning functions to government departments, or by winding down entities no longer required.

The government agrees with the Review’s view that the merging of functions will consolidate expertise and increase operational efficiency and effectiveness. In response, the Government will:

• amalgamate the functions of the Office of the Racing Integrity Commissioner and the Victorian Racing Integrity Board into a new integrity assurance body, the Racing Integrity Commission Victoria
• merge the Community Safety Building Authority into the Victorian Infrastructure Delivery Authority
• merge Emergency Recovery Victoria into Emergency Management Victoria
• abolish the Victorian Environmental Assessment Council and transfer its investigation and assessment functions to the Commissioner for Environmental Sustainability
• merge the Judicial College of Victoria and the Judicial Commission of Victoria, bringing the management of complaints regarding judicial officers together with education and professional development functions
• absorb the Health Complaints Commissioner into Safer Care Victoria
• abolish the Firearms Appeal Committee and transfer functions to the Victorian Civil and Administrative Tribunal.

Some entities serve functions that require them to operate at arm’s length from government. But the Review found there are many whose functions can be delivered from within departments, or are duplicative of the work of departments.

Consolidating functions into core departments enables clearer lines of accountability and makes government less complex to navigate for Victorians and businesses.

The government will:

• move VicHealth and HealthShare Victoria into the Department of Health
• transfer the functions of the Victorian Government Purchasing Board to the Department of Government Services
• transfer the functions of the Mine Land Rehabilitation Authority to the Department of Energy, Environment and Climate Action
• transfer the functions of the Motor Car Traders Claims Committee to the Department of Government Services
• transfer the functions of Court Services Victoria into the Department of Justice and Community Safety
• consolidate mRNA Vic and the Medical Research, Innovation and Technology Group within the Department of Jobs, Skills, Industry and Regions.

The government will also wind down entities that have achieved their original intent and are no longer required, with any residual functions transferring to other entities or departments.

The government will abolish:

• Sustainability Victoria, with its focus on environmental sustainability and energy efficiency now having been adopted by other Victorian Government entities
• Cladding Safety Victoria at the end of its remit to rectify extreme and high-risk buildings, which is expected in December 2025
• Latrobe Health Assembly, whose functions can now be carried out by Local Public Health Units, which were subsequently established to deliver health promotion communications and activities for local communities
• the Trade and Investment Advisory Board, which has been superseded by new forums
• the Police Informants Royal Commission Implementation Monitor
• the Victorian Public Sector Commission Advisory Board
• the Victorian Marine and Coastal Council
• the Road Safety Camera Commissioner and Reference Group.

Government will also reduce the number of Victorian Mental Health and Wellbeing Commissioners to create operational efficiencies.

The Victorian Government is already working to cut red tape by halving the number of business regulators by 2030. Announced in the Economic Growth Statement, this will mean Victoria has the lowest number of regulators of any state in the nation.

The government has already:

• created the new Building and Plumbing Commission, which commenced operation on 1 July 2025
• announced the creation of Safe Food Victoria, which will combine the regulatory activities of PrimeSafe, Dairy Food Safety Victoria, local councils and the Department of Health. Safe Food Victoria is planned to begin operations in mid-2026.

Consistent with the objectives of the Silver Review, the government is now announcing the next phase of regulator consolidations towards its 2030 target:

• bringing the Architects Registration Board, Surveyors Registration Board and the Veterinary Practitioners Registration Board into the Business Licensing Authority to form a new Business and Professions Regulator
• creating an Outdoor Regulator by bringing together the Game Management Authority and the Victorian Fisheries Authority
• absorbing Recycling Victoria into the Environment Protection Authority
• combining the Victorian Legal Services Board and its Commissioner with the Legal Admissions Board into a single Legal Practitioner Regulator.

Implementation will start immediately.

The Review highlights the importance of effective governance and oversight to ensure the successful implementation of the actions outlined in this response.

The Victorian Secretaries’ Board will oversee implementation of this strategy, as recommended by the Review. The Board’s monitoring role will be supported by the Department of Premier and Cabinet and the Department of Treasury and Finance.