What you need to know about the Coalition's new public service policy

While the Coalition framed the policy as a backdown on the controversial flexible working issue, tucked into it are significant details on the opposition's plan to shed public service jobs.

Mr Dutton has been talking about reducing the size of the public service for nearly a year, but has not formally announced a policy until this week.

In that time, he has said he would cut public service jobs from Canberra, claimed the 41,000 public service roles in his sights would only be in the national capital and drawn a likeness between his proposal and John Howard's massive overhaul of the bureaucracy in 1996.

All of those details now appear in doubt under the policy announced on Monday - here's what you need to know.

The Coalition says it will reduce the size of the federal public service by 41,000 places over five years, while protecting frontline and national security roles.

That figure comes from the federal budget papers. It is the number of roles - using a full-time equivalent figure - that the public service is projected to grow by under the Albanese government up until the end of June 2026.

Mr Dutton has previously incorrectly said the new roles have been in Canberra, and that he would cut jobs from the ACT, but the new policy has not made explicit reference to the national capital.

The policy also clarifies that there will be no forced redundancies and that the reduction in the size of the service will be achieved through a hiring freeze and natural attrition.

External labour would be used to access skills and expertise temporarily or on a project basis.

It comes after Mr Dutton on Saturday said his proposal would "be like the Howard government", which retrenched 30,000 public servants in a single term.

There are a lot of different aspects to this debate, and a lot of history, but the key issue is whether or not we should put a number on how many public servants the government can have.

Former Coalition governments capped the size of the public service, tying it to the workforce in the last year of the Howard government.

But in 2019 a major review of the federal public service, known as the Thodey review, found the cap should be abolished and that agency heads should be accountable for managing their workforces in an efficient way.

The Albanese government took up this recommendation when it came to power in 2022, and approved agencies for more staff as they sought to reduce outsourcing.

Labor argues that the cap eroded public service capability and led to the government spending more on expensive consultants, contractors and labour hire.

The Coalition says the bureaucracy is bloated and should be reduced in a sensible way.

It wouldn't be difficult for the Coalition to simply reduce the size of the public service, but doing so in a way that allows them to deliver their own agenda without spending more on outsourced labour would be.

Data from the Public Service Commission shows there have been about 34,800 separations from the public service since 2022, when Labor came to power. This includes a small number of sackings and retrenchments.

But this figure would include agencies the Coalition doesn't want to reduce, like Defence or Services Australia.

Public service numbers also correlate to the work the government is doing, so the Coalition would likely have to stop working on certain policies or services, or outsource them.

The policy has not addressed which agencies would be affected, or explained how it will use outsourcing in a cost effective way.

The Coalition has consistently said frontline roles will be protected, but analysis of the budget papers shows that thousands of the 41,000 public service roles have gone to service-delivery agencies like Services Australia, the National Disability Insurance Agency and the Tax Office.

The Albanese government, former senior public servants and former Liberal prime minister Malcolm Turnbull have all said that while the staffing cap was in place, the federal government became more dependent on external labour to fill in the gaps.

The Coalition says it will use external labour in a cost-effective way and still rely on the public service to deliver its core functions.

But Labor says this is their policy too, and it's the reason for the 41,000 additional jobs, so the opposition has more to say on how it will achieve both.