The Tasmanian Government is preparing to introduce $150 million in yearly savings across the public service, with a new unit set up to find where cuts should be made in government departments.
The state budget outlines how the Efficiency and Productivity Unit, announced by Treasurer Guy Barnett in March, will carry out a “comprehensive audit of all government programs” to find specific areas where savings can be made.
These planned cuts build on existing savings measures. Departments are already working under a $50 million efficiency target for 2024–25, which will rise to $150 million a year from 2026–27.
A separate $150 million “Productivity and Efficiency Measure” is set to begin in 2027–28, replacing the previously unallocated Budget Efficiency Dividend.
The savings effort started before the state budget, with Barnett announcing a hiring freeze for “non-essential” state service roles on March 2.
The freeze applies across the public service. Agency heads must now review which jobs are essential and which are not.
According to budget papers, non-essential positions are those “that could stop or a role or function that could be reduced, redesigned or transitioned to a digital service”.
This move follows continued growth in the public service, with the number of full-time equivalent positions rising from 5,315 per 100,000 people in 2022 to 5,728 as of March 2025.
The Efficiency and Productivity Unit will focus heavily on digital transformation, including “implementing automation in administrative processes” and creating “24/7 online services” to reduce staffing needs.
The unit has been given $3.3 million over two years. The government says it is moving away from general cuts across all departments and towards more specific, targeted savings.
The efficiency drive comes as Tasmania faces mounting fiscal pressure, with the state’s net operating deficit forecast to hit $1.008 billion in 2025-26 from total expenditure of $10.46 billion, before improving to $236 million by 2028-29.
The Efficiency and Productivity Unit is also expected to find more savings opportunities for future budgets, helping to make sure Tasmania’s public service is the “right size” and able to deliver key services effectively.
Further details about which programs and departments will be affected are expected in the coming months as the unit finishes its audit.
