Three major departments shed staff in $100m redundancy spree

Three federal departments alone paid out nearly $100 million in redundancy payments to staff in the 2025-26 financial year, as agencies grappled with shifting budget allocations and workforce restructuring.

Subscribe now for unlimited access.

or signup to continue reading

A Canberra Times analysis of recently tabled 2025-26 annual reports revealed the Home Affairs, Education and Agriculture departments together forked out $99.3 million in separation and redundancy payouts.

The Home Affairs department led the way in payouts, spending about $74.9 million in redundancies, a nearly tenfold increase on the $7.9 million in 2024-25 as reported in its 2025-26 annual report.

After initially confirming the departure of just a single employee in the first quarter of 2026, the department processed 679 departures by the end of 2025-26 under its voluntary redundancy program.

More than half (52.5 per cent) of its "other highly paid staff" received termination payments as part of the scheme.

The Home Affairs and Education departments collectively paid out nearly $88 million in redundancies in 2025-26. Pictures by Keegan Carroll and Gary Ramage

Over the same period, Home Affairs reduced its external spending with departmental contractor and consultant bills dropping from $344.7 million to $321.2 million.

Despite this reduction, the department faces a major decision in mid-2027 as the massive $261.2 million outsourced client inquiry services contract with Datacom Connect is scheduled to end.

Signed in 2017 and originally valued at $35.3 million, the arrangement was amended on 10 different occasions increasing its value by more than sevenfold.

The contract covers core front-line public administration work that critics have said should be brought back in-house under the federal government's flagship insourcing policy, the APS Strategic Commissioning Framework (SCF).

Community and Public Sector Union national secretary Rebecca Fawcett urged the government to use the contract's expiry to insource the role.

"We know that the visa and citizenship contact centre services delivered by workers in Home Affairs is core public sector work," Ms Fawcett said.

The Education department's annual report also recorded a rise in exit costs, paying exiting staff $13 million in 2025-26, more than three times the $4.3 million it paid out in 2024-25. It had confirmed 92 departures during the financial year.

However, its staff cuts occurred while there was an increase in external staffing costs.

In 2025-26, the department's expenditure on labour hire contracts rose by about 28 per cent, from $11 million to $14.1 million.

An education spokesperson defended the expenditure as the department continued to operate within the SCF and the labour hire spend was for the delivery of specific projects and programs.

"Labour hire was used for temporary workload peaks, time-limited programs or specialist capability not available internally, and consultants were engaged for independent advice, assurance, evaluation or specialist expertise," the spokesperson said.

Education was not alone in cutting permanent staff while ramping up outsourced spending. The Clean Energy Regulator, Safe Work Australia and the Productivity Commission expanded their contractor expenses while increasing their staff exit spend.

Ms Fawcett said union members found the ongoing reliance on external providers amid the staff cuts a "bitter pill to swallow".

"It's their jobs that are on the line; their jobs being outsourced - this kind of wasteful spend just doesn't stack up ... it's inconceivable," Ms Fawcett said.

"What we are seeing with voluntary redundancies is that the public sector workers left behind have to do more with less, while agencies continue to increase their spending on wasteful and ineffective labour hire companies, contractors and consultants."

The Agriculture department had its redundancy expenses jump more than six times from about $1.8 million in 2024-25 to $11.4 million in 2025-26.

After cutting 56 executive level staff, the National Indigenous Australians Agency's annual report showed it paid out about $9.7 million in 2025-26, more than seven times the $1.3 million it paid out in 2024-25.

Meanwhile, the Australian Nuclear Science and Technology Organisation recorded a threefold jump in redundancy and separation costs, rising from $1.5 million in 2024-25 to $4.6 million in 2025-26, after a reorganisation of its executive and nuclear science divisions.

Home Affairs was contacted for comment but did not respond before deadline.

More from Public Service