Merged, consolidated and abolished: the government will work through a “methodical” process of slashing some 175 agencies from the Commonwealth ranks. Read the full list.

Prime Minister Tony Abbott assured the nation that “business goes on” amid the siege situation in Sydney that caused the evacuation of New South Wales and Commonwealth agencies in Martin Place. The Mid-year Economic and Fiscal Outlook — axing and consolidating 175 agencies — was no exception.

Finance Minister Mathias Cormann would not quantify additional staff cuts to the Commonwealth public service, originally announced in the budget as 16,500.

“We’re still on track for that,” Cormann told the media conference in Parliament House today. “Our objective is to bring staffing levels across the public sector federally back to the same level as back in 2007-08.

“There will obviously be further efficiencies as a result of announcements reflected in MYEFO today, but that process is now to be gone through. Our objective ultimately, as it should be, is to ensure the administration and operations of government at a federal level are as efficient and effective as possible. Some of the decisions, of course, to merge bodies, to abolish bodies, to consolidate various functions will lead to further opportunities for efficiencies but they will be quantified as we go through those processes in an orderly and methodical fashion.”

MYEFO’s largest savings are $3.7 billion over four years in cuts to foreign aid and lengthening the budgeted lifespan of in-house computer software from four years to five years. The government estimates software efficiencies will save $420 million over the four years to 2017-18.

Other expenses are going up, notably redundancies and superannuation payouts. Some $280 million will be paid out in redundancy payouts this year, although with fewer predicted separations in the next three years they anticipate paying out a further $50 million each year until 2018. Superannuation costs have risen 67%, or an additional $2.47 billion, as staff retire.

Contestability, streamlining and targeting of program delivery remains a top priority of the government, as well as functional and efficiency reviews of major government bodies. The report fingers Health and Education for the first to be assessed:

“The government will commence in‑depth reviews of the functions and efficiency particularly of larger government agencies and departments. These reviews will determine whether the current resourcing and functions performed within an entity are aligned with the Government’s policy priorities and that they are being undertaken as efficiently as possible. The departments of Health and Education (other than higher education) will be the first bodies to be reviewed.

“The 2014‑15 MYEFO includes a further tranche of major rationalisation of government bodies, to ensure the public sector is as streamlined, effective and transparent as possible. Delivering a smaller and more rational government footprint is designed to clarify lines of accountability, to make the public sector more agile and better able to address changing pressures and government priorities.”

A further 175 government bodies will be cut, building on previous decisions to defund agencies in the 2014-15 budget, “taking the total reduction in the number of government bodies since the election to 251”.

In total 138 statutory bodies, advisory committees, councils and boards will be abolish. Another 15 bodies will be merged into line departments, and 26 bodies will be reduced to six but remain separate from their line department. Two bodies will have responsibilities transferred outside the Commonwealth.

Five bodies will consolidate their back office functions with shared service centres or supporting departments. The government says these measures will “further reduce the overheads from an excessive number of stand‑alone bodies, reducing inefficiencies and removing duplicated effort across the public sector”.

MYEFO also includes two new initiatives: the introduction of an Australian Government Governance Policy, to take effect from December 15, to impose new constraints on the establishment and design of new government bodies, and the launch of an Australian Government Organisations Register, to create the first complete online listing of all government bodies.

Cormann says the register reveals that at taking office there were 1252 separate government bodies. “Our goal is to get this well below a 1000 by the end of this term of Government,” he said in his MYEFO ministerial statement.

Nadine Flood, the Community and Public Sector Union national secretary, responded to the announcement with concern:

“The Abbott government has already cut at least 8000 jobs this year, the deepest cuts to the public service in over a decade. MYEFO confirms the government is on track to cut at least another 8700 jobs this year. On top of this is the introduction of so called ‘contestability’ for public services, which is nothing more than cover for massive outsourcing and privatisation programs that will see jobs and services sold off. The only contest will be which big business will pick up the contract.”

* = Not quantified and no save returned to Budget.

+ = The savings from the merger of the Australian Government Solicitor into the Attorney-General’s Department will be quantified in 2015, following a review of legal services to identify efficiencies.