Productivity chief warns public service cuts won't save money

The Coalition party has promised to cut waste in government bureaucracy. They are critical of Labor for increasing the size of the public sector. However, the head of the Productivity Commission, Danielle Wood, has warned that reducing the public service might not save much money and could complicate economic reforms. Opposition Leader Peter Dutton has frequently denounced the government's public service growth. He stated last month that the public sector should not exceed 200,000 employees. The opposition claims that their cuts will not affect "frontline" workers, but Wood argues that excluding these employees will limit potential savings. She noted that public service jobs are a small part of government spending. Economist Steven Hamilton also supports this view. He stated that the Australian Public Service is a smaller portion of total employment compared to when John Howard was in office in 2007. He highlighted that wages for public servants make up less than 4 percent of federal spending. The Productivity Commission is preparing a significant report on economic reforms, set to be released after the federal election on or before May 17. Treasurer Jim Chalmers has tasked the commission with investigating five key areas, including building a skilled workforce and investing in clean energy. There are rising concerns about Australia's productivity and economic stability. Housing will be a major focus in the upcoming report, according to Wood. She believes it is critical for both social and economic reasons. She mentioned that regulations at all government levels have made building housing more complex. Wood has also addressed the government's "Future Made in Australia" policy. While she appreciates its new national interest framework, she is critical of providing incentives to select industries when others face skilled labor shortages. Lastly, she discussed work-from-home policies. While some studies say full remote work can hurt productivity, she believes a hybrid approach might positively impact productivity when managed well. The opposition is pushing for federal public servants to return to the office.