Abbott’s contestability program “could result in loss of 30,000 government jobs”

Tens of thousands more jobs within the public sector are due to be considered for potential privatisation, The Canberra Times has reported.

This comes as Abbott’s government begins its work on the “contestability program”.

However, one public sector expert warns that the program could catalyse a “slow bleed” of the public service that could result in the loss of more than 30,000 Commonwealth government jobs being lost over the next few years.

The Finance Department has reportedly confirmed that “portfolio stocktakes” are in process, with certain departments being assessed to see if their work can be outsourced to the private sector or the growing “shared services”.

It is also reported that departmental bosses are to be instructed to replace employees with technology wherever possible.

The “pilot stocktakes” have begun already at the Finance and Communication departments so that the government can test-run the process before implementing it in all commonwealth operations. The process could take up to three years.

Finance Minister Mathias Cormann – whose department is implementing the contestability program – has said that he wants to be aware of which government functions should expect competition from private companies and which are able to be taken over by the private sector.

A spokeswoman for the Finance Department confirmed this week that her department was piloting the early stages of the program, which is due to be completed in “early 2015”.

All departments are also due to receive “efficiency reviews”, with the Health and Education departments the first to be reviewed by “independent experts”.

Professor Janine O'Flynn of the University of Melbourne – an expert in public sector finance – told The Canberra Times that the contestability program was part of the third phase of the government's public sector reforms, and that this stage could have a bigger impact than the first two.

“Once you get into that area-by-area assessment for potential outsourcing, I think that's where the big cuts are going to come,” she said. “At the time when those 16,500 jobs were announced, I made a private prediction that we might hit over 30,000 by the time you include what will start to happen once the contestability framework kicks in.”

The government already has several studies for sell-offs in progress, with departments including the Australian Mint, Defence Housing Australia, Australian Hearing Services and the Australian Securities and Investments Commission registry being scoped for privatisation.

The Canberra Times reported that Medicare, Centrelink and some Veterans Affairs payment services may be taken over by private companies. The Finance Department is also reported to be looking at the sale of ICON, the system that links 80 government agencies at 400 sites around Canberra.