There was some movement at Immigration following our story last week on rumours of impending large staff cuts. Secretary Andrew Metcalfe sent out an email to staff on Friday explaining the financial pressures his Department was under and that he had established two separate reviews to identify savings.

While the rumoured figures of 10-15% reductions were not mentioned, Metcalfe said executives would be seeking ideas from staff “on where savings could be made. I encourage you to discuss with your managers any ideas or queries you may have, including the possibility of voluntary redundancies or flexible work practices such as part-time work or extended leave.”

In the Public Service, when management issues a general call for voluntary redundancies, it’s pretty certain large cuts are on the way. Canberra’s restaurants and builders might think about preparing for another 1996-style boom.

The Community and Public Sector Union has pro-actively launched a campaign against public sector job cuts. The CPSU is particularly focussing on the efficiency dividend, which cuts departmental allocations by 1.25% annually. Last year, the new Government upped it to 3.25%, which made for hard times for small agencies with no fat and limited capacity to reallocate staff.

The efficiency dividend is part of the Public Service furniture, having been introduced by the Hawke Government. The theory is that it maintains pressures on agencies to continually seek efficiencies, rather than having the Department of Finance spend its time hunting through other departments counting paper clips, conducting headcounts and checking travel budgets. It became redundant in the last term of the Howard Government when departments had more money than they could spend and recruitment and retention of staff became difficult. Now it is biting again.

Lindsay Tanner yesterday said the Government had no “kind of target or intention of overall cuts to public sector employment”. That doesn’t rule out function-based cuts or re-allocations of staff across the APS. In fact, Tanner made a point of noting the Government had made it easier to move staff between departments.

Public service savings are easy for governments. Bureaucrats scream, but the ruckus is confined to Canberra, where there’s basically no unemployment anyway. But it is the Government itself which pays long-term for such savings, through poorer advice and service from departments struggling to meet ministerial demands with available resources. Whether Kevin “I’ve simply got news for the Public Service” understands that isn’t clear. His response to problems is to work harder and longer and he seems to think everyone else works that way too.

Crikey will be continuously monitoring the Government’s cuts to the Public Service in the forthcoming Budget process. Public servants can send their tips and rumours to Boss@crikey.com.au.