LARGE parts of the Victorian public service could be outsourced to the private sector as the state government scrambles to free up cash to boost infrastructure and services.



In what could be the biggest shake-up of the public sector since the Kennett era, a government taskforce headed by Department of Premier and Cabinet secretary Helen Silver is believed to be closely scrutinising a range of administrative and support roles, including information technology, human resources, finance, corporate services, legal services and the government reporting service.



The government is applying to the Australian Taxation Office to offer a restricted class of redundancies targeting between 10 per cent and 20 per cent of some agencies, while avoiding workers involved in delivery of ‘‘front-line’’ services.



Department of Human Services secretary Gill Callister has confirmed the department will shed about 500 positions. The Department of Sustainability and Environment is likely to lose about 200, while the Department of Business Innovation is likely to lose 15 per cent of its staff — about 110 positions. It is believed the Department of Primary Industry will lose about 400 positions and Justice around 690.



In addition to the proposed cuts from the so-called Better Services Taskforce, an unreleased review of state finances, headed by Kennett-era Treasury secretary Mike Vertigan, has also recommended deep public sector cuts, outsourcing, privatisation and spending cuts.



The government has asked the Vertigan review to examine ‘‘private sector involvement in service delivery’’.



The moves have been initiated as the government tries to deliver a minimum $100 million budget surplus as part of a strategy to pay for future infrastructure without taking on debt. With the budget deeply in deficit during the second half of last year and revenue weak, it is struggling to find the money.



Community and Public Sector Union Victorian secretary Karen Batt was unsympathetic, accusing it of ‘‘taking the public out of public service... There is clearly a privatisation agenda’’.



Labor frontbencher Martin Pakula said: ‘‘If the Premier is getting ready to bring in the toecutters, he must come clean now and tell Victorians what it means for jobs.’’



The government is also facing hostility on another front, with business and unions attacking its decision to raid the Victorian WorkCover Authority to keep the budget in the black. Laws passed last night will result in $471 million being taken out of the WorkCover Authority over four years.



Australian Industry Group Victorian director Tim Piper said no other workplace insurance system in Australian paid a dividend to government.



Victorian Employers’ Chamber of Commerce and Industry chief Mark Stone said the move ‘‘must not endanger the government’s capacity or willingness’’ to cut WorkSafe premiums.



More than 500 unionists rallied against the changes. Ralph Edwards of the Construction, Forestry, Mining and Energy Union said Premier Ted Baillieu ‘‘has finally done something... Unfortunately, he’s done the wrong thing.’’



Cesar Melhem of the Australian Workers’ Union said: ‘‘No government should help itself to workers’ money’’.



