Three federal departments spent nearly $100 million on redundancies in 2025-26

Home Affairs, Education and Agriculture shed workers while some outsourced spending rose

By LineZotpaper

Published23 October 2026

Read Time2 min

Three federal departments paid out almost $100 million in redundancy payments last financial year, according to annual report data analysed by The Canberra Times, with Home Affairs alone spending $74.9 million as part of a voluntary separation program that saw hundreds of staff depart.

The Home Affairs, Education and Agriculture departments together spent $99.3 million on separation and redundancy payouts in 2025-26, a sharp increase from the previous year. Home Affairs accounted for the bulk of the figure, paying $74.9 million, nearly ten times the $7.9 million it spent in 2024-25. The department processed 679 departures under its voluntary redundancy program, with more than half of its "other highly paid staff" receiving termination payments.

Education department exit costs rose to $13 million, more than triple the $4.3 million paid out the year before, after 92 departures. Agriculture's redundancy expenses jumped from $1.8 million to $11.4 million, a sixfold increase.

Despite cutting permanent staff, some agencies increased spending on external labour. Education's expenditure on labour hire contracts rose about 28 per cent, from $11 million to $14.1 million. A department spokesperson said labour hire was used for "temporary workload peaks, time-limited programs or specialist capability not available internally." The Clean Energy Regulator, Safe Work Australia and the Productivity Commission also expanded contractor expenses while increasing staff exit costs.

Community and Public Sector Union national secretary Rebecca Fawcett said union members found the reliance on external providers amid 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," she said. Ms Fawcett urged the government to insource core work, pointing to a $261.2 million outsourced contract with Datacom Connect that expires in mid-2027.

Analysis

Why This Matters

The redundancies affect thousands of public servants and raise questions about workforce stability and service delivery.
The trend of cutting permanent staff while increasing contractor spending contradicts the government's stated insourcing policy under the APS Strategic Commissioning Framework.
The Home Affairs contract expiry in 2027 will test the government's commitment to bringing core work back in-house.

Background

The APS has been under pressure to reduce headcount and find efficiencies, with voluntary redundancy programs offered across several departments. At the same time, spending on consultants and labour hire has risen in some agencies, drawing criticism from the public sector union. The Strategic Commissioning Framework, introduced by the federal government, encourages insourcing of public sector work, but multiple contracts remain external.

Key Perspectives

CPSU (Rebecca Fawcett): The union argues that redundancies alongside rising contractor spending are wasteful and harm morale, with remaining staff forced to "do more with less." It calls for insourcing, particularly of visa and citizenship contact centre work. Education department (spokesperson): Defends labour hire use as necessary for temporary peaks and specialist roles, stating it operates within the Strategic Commissioning Framework. Critics/Skeptics: The discrepancy between cutting permanent roles and increasing external spending suggests the savings from redundancies may be offset by contractor costs, undermining the efficiency goal.

What to Watch

The mid-2027 expiry of Home Affairs' $261.2 million Datacom Connect contract and whether the government insources the work.
Annual reports from other agencies for 2026-27 to see if the trend of cutting staff while boosting contractor spending continues.
The impact on APS employee census results in future years, as Home Affairs already saw a decline in 2026.

Sources

Three major departments shed staff in $100m redundancy spree · The Canberra Times - News

Checked

12 claims in this story checked against 1 source: 10 supported.

Show each claim

SupportedThree federal departments spent nearly $100 million on redundancies in 2025-26.The Canberra Times - News: “Three federal departments alone paid out nearly $100 million in redundancy payments to staff in the 2025-26 financial year”
SupportedThe Canberra Times’ analysis of annual reports found the three departments paid $99.3 million in separation and redundancy payouts.The Canberra Times - News: “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.”
SupportedHome Affairs paid $74.9 million, nearly ten times its $7.9 million in 2024-25, through its voluntary redundancy program.The Canberra Times - News: “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”
SupportedHome Affairs processed 679 departures under its voluntary redundancy program.The Canberra Times - News: “the department processed 679 departures by the end of 2025-26 under its voluntary redundancy program.”
Partly supportedEducation exit costs rose to $13 million, more than triple the previous year’s $4.3 million, after 92 departures.The Canberra Times - News: “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.”
Partly supportedAgriculture’s redundancy expenses rose from about $1.8 million to $11.4 million, a sixfold increase.The Canberra Times - News: “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.”
SupportedEducation’s labour-hire spending rose about 28 per cent, from $11 million to $14.1 million.The Canberra Times - News: “the department's expenditure on labour hire contracts rose by about 28 per cent, from $11 million to $14.1 million.”
SupportedAn Education spokesperson said labour hire was used for “temporary workload peaks, time-limited programs or specialist capability not available internally.”The Canberra Times - News: ““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.”
SupportedThe Clean Energy Regulator, Safe Work Australia and the Productivity Commission increased contractor expenses while also increasing staff exit spending.The Canberra Times - News: “The Clean Energy Regulator, Safe Work Australia and the Productivity Commission expanded their contractor expenses while increasing their staff exit spend.”
SupportedRebecca Fawcett said union members found reliance on external providers amid staff cuts a “bitter pill to swallow.”The Canberra Times - News: “Ms Fawcett said union members found the ongoing reliance on external providers amid the staff cuts a “bitter pill to swallow”.”
SupportedFawcett said, “It's their jobs that are on the line; their jobs being outsourced – this kind of wasteful spend just doesn't stack up.”The Canberra Times - News: ““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.”
SupportedFawcett urged the government to insource core work, pointing to a $261.2 million Datacom Connect contract due to end in mid-2027.The Canberra Times - News: “Community and Public Sector Union national secretary Rebecca Fawcett urged the government to use the contract's expiry to insource the role.”