Wielding the axe … Premier Barry O’Farrell / Pic: Kristi Miller Source: The Daily Telegraph

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PREMIER Barry O’Farrell has taken a feather to the public service with only 5000 workers facing the chopping block – although that number could double.

Combined with capping wages the move is expected to save $6 billion over the next four years, with no department immune from the cuts.

Jobs in HR, payroll and administration are to go, with the government establishing six shared corporate services hubs to manage all departments.

At least three prisons will be shut – Parramatta, Berrima and Kirkconnell – forcing 350 job losses, while NSW Health will shed 300 from its head office and 350 from the merger of RTA, RailCorp and Sydney Ferries.

At the same time, however, the government is employing an extra 200 teachers, 940 nurses and 150 new police officers this year.

Business groups yesterday welcomed the overhaul of the public sector saying it was time tough decisions were made to rein in spiralling costs.

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But the move is expected to increase the anger among public servants, with thousands expected to rally tomorrow outside Parliament.

Workers will be offered voluntary redundancies and given a generous severance pay. Those who don’t take up the offer face finding themselves in the unemployment queue, with Mr O’Farrell scrapping the previous government’s no forced redundancy scheme and unattached list, which kept sacked public servants on the payroll for years.

Treasurer Mike Baird made no apologies for the cuts, saying the greatest driver of growth in the past decade had been employee-related expenses, which had increased 6.5 per cent each year.

Government wage increases have exceeded the private sector by 7.9 per cent. Half of the state’s expenses goes towards wages, costing more than $29 million.

With privatisation of the ferry services, which will cost 100 jobs, Mr Baird warned he could go further by contracting prisons and road maintenance. By capping wages at 2.5 per cent, the government is expected to claw back $2 billion over four years.

“To underpin delivery of these savings, the O’Farrell government is prepared to offer around 5000 voluntary redundancies over the next four years, primarily to reduce the number of head office and back-room positions,” Mr Baird said.