They stare out from job ads, attractive, elegantly-attired, like no public servant you’ve ever met, inviting you to come and join them in the exciting world of … auditing. Taxation. Agriculture. Defence procurement. The national papers are full of job ads for public servants, all trying to make their agency sound exciting.

At a time when the Government is refusing to rule out compulsory redundancies in the Commonwealth Public service, most public servants will tell you that the problem isn’t too many of them, but not enough. And not just the empire builders and mandarins-in-training.

As everyone now knows, the Public service exploded under the previous Government. From a nadir in 1999 of just under 120,000 public servants, it has maxed out at about 154,000. The number of Canberra-based public servants has also been growing and is now more than 35% of the entire service.

But there’s a major problem with that. Unemployment in Canberra is currently 2.4%. It’s been below 3.5% for years. That means that public service agencies have to either steal each other’s staff, rely on temporary staff, or attract people from interstate.

And attracting people to Canberra has never been harder. While Canberra is the proverbial great place to bring up kids, it has never been able to compete with Sydney and Melbourne. But now Queensland and Western Australia – traditionally a good source for bright young economists and lawyers – are vacuuming up talent in the resources boom. Nor can the Public service match private sector salaries. Indeed, it can’t even match many State public services, particularly at management level, which tend to dominate in Canberra. And that’s before you even get to the emerging effects of the retirement of baby boomers, who form the bulk of the APS’s senior ranks.

Some Departments are suffering more than others, which is why a department like Health and Ageing has been shedding temporary staff in preparation for the budget, but others continue to spend a lot of money on half-page newspaper ads for “multiple positions”. The Department of Finance, which is driving the budget cuts, has been significantly understaffed for several years, with virtually permanent job ads in the national press.

Now, there’s been plenty of employers reading this and wondering what’s new. But there are short and longer-term consequences of this for public policy. The new Government, whose Prime Minister wants a lot done and done quickly, is pushing its bureaucrats hard. The reduction in ministerial staff has made matters worse, with inexperienced ministers and their advisers under the pump to implement election commitments and find savings while keeping the Prime Minister happy. In every agency the story is the same – Rudd, via Prime Minister and Cabinet, is demanding inordinate amounts of briefing, often in very short deadlines. The result is under-prepared material and lack of attention to detail.

The longer term consequence, which will need to be considered once the 2008-09 budget is out of the way, is more serious. Government and communities needs high-quality public servants, who take serving them seriously and who have corporate memory, people who remember the stuff-ups of the past and how to avoid repeating them. But last year the proportion of public servants with less than five years’ experience topped 50,000, or a third of the entire service. Those with 5-10 years also continued to climb, to 20%. This will begin to seriously affect the capacity of the public service to serve government effectively.

A recession would help. The quality of talent entering the public service tends to improve significantly when the job queues are long. Without that, or the relocation of the capital to Sydney or Melbourne, Governments will have to make do with a poorer-quality public service stretched thinner than ever.