The Federal Government is reviewing how it can deliver its promise to axe 12,000 federal public service jobs.

The Coalition has been advised that policies of the former Labor government will lead to the loss of almost 14,500 jobs over the next four years.

It has been told not enough funding has been allocated for redundancies.

The Coalition's plan to cut 12,000 positions and save $5.2 billion through natural attrition would come on top of that.

But head of the federal Finance Department, David Tune, says it would not be possible for the Government to reach its savings target through a recruitment freeze alone.

Finance Minister Mathias Cormann has told AM the plan is now on hold.

"Given the impact of Labor's secret cuts which are currently being felt across the public service, we will have to review the timing and approach to this further reduction that we plan, to take into account the impact of Labor's secret public service cuts," he said.

He says the Government is still committed to its policy but will ask the Commission of Audit to consider the timing and approach of the plans.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 3 minutes 48 seconds 3 m 48 s Coalition says Labor planned to cut more than 14,000 public service jobs ( Louise Yaxley ) Download 1.7 MB

"Nobody knew before the election that Labor's cuts were based on an expectation that 14,500 jobs would go through redundancy," he said.

"The Parliamentary Budget Office, which did our costings, didn't know. We didn't know. The Australian people didn't know."

But Labor Senator Penny Wong says the Coalition is using the issue to prepare for more widespread spending cuts.

"You are setting to break your election commitments and this is all a political game to try and blame the Opposition," she said.

"No amount of you repeating your grabs from the table will hide it."

The Federal Government is also refusing to say whether it will continue to exclude defence and security agencies from future budget cuts.

Before the election, the Coalition promised its recruitment freeze would not apply to the Australian Federal Police, Customs, Australian Defence Force, ASIO and other intelligence agencies.

"We're currently reconsidering our approach to this policy and we will consider in particular the advice from the Commission of Audit," said Mr Cormann.

ACT politicians lock horns over job cuts

ACT Senator Zed Seselja says Labor openly lied during the election campaign.

"Labor was cutting jobs behind Canberrans' backs," he said.

"Not only did the former government lie about their job cuts, they irresponsibly also failed to ensure that departments could continue to meet their budgets."

But shadow assistant treasurer and Member for Fraser Andrew Leigh says Labor never set a target for job losses.

"We imposed an efficiency dividend it's true but we certainly encouraged agencies to find savings in areas like travel and procurement rather than through making redundancies," he said.