There are rumours from a number of sources that the Department of Immigration and Citizenship faces substantial staff cuts — up to 10-15% — in the forthcoming budget round, with mid-level managers recently called into meetings and asked to identify means of reducing staff numbers. The cuts would, the rumours go, centre on the Department’s National Office in Canberra.

Immigration’s staffing levels have expanded significantly since 2003 from around 4,800 to over 8,000 local and overseas staff last year as immigration levels increased significantly and the Department moved to address the recommendations of the 2005 Palmer Report following the Cornelia Rau debacle. Head office numbers in Canberra have increased by a third to nearly 3000 people.

On Monday, Immigration Minister Chris Evans flagged significant cuts to Australia’s immigration program, with the 2009-10 level to be determined by Cabinet in the run-up to the budget. Last week, Evans confirmed that 457 visa applications had collapsed, falling 30% between September 2008 and January this year. The Government also plans to require employers to pay 457 visa workers market rates, meaning they will become less attractive to employers looking to undercut domestic wages.

The maths of this significant fall in temporary and permanent immigration means there’ll be less work for Immigration bureaucrats both in Australia and overseas. Some cuts are therefore inevitable. However, 10-15% is an almost implausibly high number — it would be larger than the sort of cuts inflicted on the Public Service by the new Howard Government in 1996-97, and mean that 800-1000 staff would need to be redeployed within the Public Service or offered redundancy packages.

Immigration spokesman Sandi Logan told Crikey the numbers had no basis in fact and that no decisions had been made on the efficiencies that would have to be found in the current Budget process, although deliberations were underway.

Last year’s efficiency dividend cuts and the Rudd Government’s furious workload have left many parts of the APS reeling, with too much to do and insufficient staff to do it. The APS had expanded significantly under the free-spending latter-era Howard Government, but by 2007 was struggling to recruit and retain quality staff. An ageing workforce and an inability to attract employees in the face of strong competition from a private sector at near-full employment meant departments and agencies struggled to put people behind desks. The result — heavy reliance on consultants — has been amply demonstrated in recent days by the AFR, which exposed a surge in the level of Rudd Government consultant spending despite promises to curb it.

And don’t be misled by revelations that DEEWR staff attended a seminar “on wellbeing”. It is one of the eternal problems of the APS that it can never find ways to spend its training budgets, and the busier bureaucrats are, the less training they do.

There’ll be a lot more rumours like this as the Public Services faces what is likely to be a much bloodier Budget process than last year’s, when the new Government halted its search for cuts once it achieved its surplus target. This time around the Expenditure Review Committee will have no upper limit in mind except to avoid cuts that will significantly effect demand or hurt important sectors like construction.

With the lower-hanging fruit of easy savings gone, and the need to fund the huge ongoing cost of a pension rise, the Government might finally fulfil Kevin Rudd’s threat to “take a meat-axe to the Public Service”. That won’t go down well in a Public Service where discontent with the Rudd style is already widespread.