Some of the public service's worst nightmares are starting to come true with reports of 16,000 public service jobs to be slashed and 70-plus government agencies to be merged or abolished in Tuesday's federal budget as part of Tony Abbott's move toward smaller government.

The Australian Financial Review says the government will also put other agencies on notice in foreshadowing deeper consolidation later in the year.

Jobs to go: Joe Hockey is expected to announce another 50 government agencies will be abolished in Tuesday's budget. Credit:Alex Ellinghausen

Those earmarked for abolition now range from the obscure Whitlam government Albury-Wodonga Development Corporation, to the more contemporary Council of Australian Governments Reform Council.