Australia to scrap 175 government agencies, warns of job losses: Reports

The conservative administration of Prime Minister Tony Abbott has consistently argued that government had become too big and wasteful under the previous leadership. -- PHOTO: REUTERS
The conservative administration of Prime Minister Tony Abbott has consistently argued that government had become too big and wasteful under the previous leadership. -- PHOTO: REUTERS

SYDNEY (AFP) - Australia's government warned of further job losses on Saturday as media reports said around 175 government agencies working in areas as diverse as Antarctic science and drought will be scrapped.

The conservative administration of Prime Minister Tony Abbott, which came to power in September 2013, has consistently argued that government had become too big and wasteful under the previous Labor leadership. It axed 76 agencies in the May Budget, and has since sold off the nation's largest health insurer Medibank Private among other assets and is now planning a larger round of cuts.

Finance Minister Mathias Cormann said the government's decision, expected to be formally announced on Monday as part of a mid-year economic outlook, would mean more jobs would go. "If you reduce the number of government bodies, there will be an impact on jobs across the public service," he told Sky News on Saturday. "What we will see is that as a result of our reform efforts so far, that the size of the public service will be back down to the same level as what it was in 2007, 2008. We think that's appropriate."

The Weekend Australian reported that 138 government agencies will be abolished, including the Vietnam Veterans Family Study Consultative Forum, the Antarctic Science Advisory Committee and a High-Level Group on Drought. Fifteen more - including the Australian Government Solicitor - will be consolidated into government departments and a further 26 merged (resulting in the net reduction of 20 bodies), bringing the total loss to more than 170, the paper said.

"The goal is to ensure that the government is as big as it needs to be but as small as it can be," Mr Cormann told Sky News.

Treasurer Joe Hockey is expected to unveil a blowout in the federal deficit in the mid-year economic and fiscal outlook Monday, with some estimates of a A$5 billion (S$5.4 billion) increase to A$35 billion given sharp declines in commodity prices and weakening demand from China.

Opposition leader Bill Shorten said the abolition of scores of agencies could further damage the economy and stifle confidence at a critical juncture.

"Australia's at a crossroads. We are narrowly reliant on our mineral sales globally to sustain Australia - the price of our minerals is falling," he said.

"The last thing Australia needs now if we want to have growth in the future... is for Tony Abbott to be killing jobs and killing confidence."