The Albanese government will increase the federal public service by 3,400 roles over the next year, adding to the more than 40,000 roles created since Labor came to power.
The budget papers also include another hit to the bottom lines of consultancy and labour hire firms, with Labor committing to slash a further $719m in external resourcing by 2028-29, totalling $4.7bn since 2022.
The size and efficiency of the public service has come under attack from the opposition, which has pledged to introduce a government efficiency agency, if elected, in an attempt to mirror Donald Trump’s bureaucratic razor gang in the US.
The opposition leader, Peter Dutton, and his frontbench have repeatedly suggested the Coalition would slash a number of jobs in a quest for budget savings.
In defiance of the criticism, Labor has increased its average staffing level by 3,436 jobs for 2025-26, the budget papers show, with the total number of roles now expected to reach 213,439.
Most of those roles went to the National Disability Insurance Agency, the tax office and the defence department.
The budget shows 11,800 permanent roles have been created since May 2022 to replace work previously undertaken by consultants and contractors.
The converted jobs make up about 28% of the 41,411 jobs added to the public service since Labor took office.
One in five of those converted jobs were created in the NDIA, tasked with steering changes to the disability insurance scheme relied upon by more than 700,000 Australians with disability.
The public service minister, Katy Gallagher, defended the increases as necessary after “almost a decade of outsourcing, underinvestment and reduced service outcomes” under former Coalition governments.
“An investment in our public service and its capability is an investment in the future security and prosperity of Australia,” Gallagher wrote in her budget preface.
“The Australian government recognises it cannot deliver outcomes for Australians without the foundations of a strong public service.”
The minister’s budget comments also point to a growing demand for services due to the country’s ageing population, the changing geostrategic environment and increasing economic complexities.
Claims on Services Australia, the central welfare support agency, have increased by 35% since 2012, the preface said.
Gallagher also highlighted the fact that public servants made up 1.6% of the labour force in 2006-07 under the Howard government, compared with 1.5% in 2025-26, despite the overall headcount increasing by more than 45,000.
The shadow public service minister, Jane Hume, has said the opposition would curb the number of bureaucrats in Canberra but said frontline services, such as those in Services Australia, would be spared from any cuts.
“Let’s face it, services haven’t improved but the cost and size of the public service has expanded and bloated exponentially,” she told Sky News on Sunday.
Dutton has previously floated targeting diversity and inclusion positions in the Australian Public Service as well as “change managers” and “communication specialists”.
The opposition has yet to outline where it would focus on first in its efforts to find savings beyond targeting non-frontline roles in Canberra. About 37% of APS jobs are in Canberra.
A ceiling on the number of public servants was previously introduced in the 2015-16 budget under the Turnbull government.
It used the average staffing level to cap the public service at or below 167,596 – equivalent to staffing levels in 2006-07.
Departments and agencies subsequently used labour hire firms and contractors to bring on additional staff to circumvent the staffing cap.
A Labor audit of the Morrison government in 2023 found 112 agencies had spent $20.8bn on external firms, employing the equivalent of 53,900 full-time staff.
