Federal Treasurer Wayne Swan has refused to rule out the possibility of public sector job cuts as a means to return the budget to surplus in the 2012-13 financial year.

 

Mr Swan announced that it was the onus of public departments and agencies to source their 2.5 per cent budget reductions, with unions expressing their fears that up to 3,000 jobs could be cut.

 

Mr Swan was quick to insist in an interview with ABC radio that government services would continue as normal.

 

"I don't think there'll be any forced redundancies, but it will be up to those agencies to follow the principles that we have outlined here," Mr Swan said.

 

Community and Public Sector Union (CPSU) National Secretary Nadine Flood says the efficiency dividend increase will mean redundancies for staff and longer queues for people using essential public services.

 

“Frontline agencies spend over two-thirds of their budget on employees. Our best analysis shows up to 3000 jobs could be lost across the public service. It’s a shocking decision,” Ms Flood said.

 

“These are real jobs providing real services in every community across Australia. “While the Government may avoid forced redundancies, it still means these jobs will not be filled. They are good jobs, particularly for women and provide critical frontline services.

 

Mr Swan’s comments come as the Federal Government has released the 2011-12 Mid-Year Economic and Fiscal Outlook (MYEFO), outlining what the government describes as ‘solid economic growth, low debt and a return to surplus in 2012-13’.

 

The Federal Government has remained optimistic in its goal to return the budget to surplus in the 2012-13 financial year, despite recent global deterioration cutting an estimated $20 billion from government revenues.

 

Real GDP is now expected to grow by 3¼ per cent in 2011-12 and 2012-13, downgrades of ¾ of a percentage point in 2011-12 and ½ of a percentage point in 2012-13.