As 2025 draws to a close, public servants across Australia are looking forward to a well-earned break. But with a new year comes fresh challenges and ongoing reforms that will shape the federal public sector. Following an eventful period marked by an election and significant policy shifts, 2026 is poised to be another bumper year for the Australian Public Service (APS).
Navigating Fiscal Headwinds and the Redundancy Question
A defining theme for the coming year will be financial pressure. Late in November 2025, the Department of Finance instructed agencies to pinpoint 5 per cent of expenditure that could be cut. While Treasurer Jim Chalmers later clarified that the government wasn't planning major staffing reductions, the directive signals tighter budgets ahead.
Although the re-elected Labor government avoided the deeper cuts proposed by the Coalition, the spectre of job losses remains. Rising inflation and global economic uncertainty add to the pressure. The government now faces the difficult task of finding savings while honouring its election commitments to avoid mass redundancies, a balance that will test APS leadership throughout 2026.
The Evolution of Workplace Rights: Flexibility and Disconnection
Industrial relations will continue to be a hot topic, particularly around where and when public servants work. Labor's first-term reforms, including stronger flexible work entitlements and a new right to disconnect, have given APS employees some of the best conditions in the country. Their enterprise agreement presumes approval for flexible arrangements and sets no cap on days working out of the office.
However, the practical application of these rights is still being tested. With few significant legal cases so far, the Fair Work Commission has postponed a review of the right to disconnect scheme for 12 months. As flexible work becomes standard and tensions over after-hours contact persist, 2026 is likely to bring further legal clarifications and workplace developments.
Long-Awaited Whistleblower Reforms Finally on the Horizon
One of the most anticipated changes for 2026 is the overhaul of public sector whistleblower protections. An exposure draft for reforming the Public Interest Disclosure Act 2013 was released in 2025, but the bill was not introduced to parliament as expected before the end of the sitting year.
Reforms are now anticipated early in 2026. These are set to include the establishment of a dedicated Whistleblower Ombudsman within the Commonwealth Ombudsman's office. The urgent need for change was highlighted by the protracted prosecution of ATO whistleblower Richard Boyle, who ultimately received a non-conviction order. The reforms aim to prevent such ordeals by strengthening protections and support mechanisms.
Contractors, Non-Competes, and "Same Job, Same Pay"
Further industrial relations changes will significantly impact the APS's use of contractors. The government's proposal to ban non-compete clauses for employees earning under the high-income threshold (currently $175,000) is progressing, with draft legislation expected in 2026 for a 2027 start.
Simultaneously, the "same job, same pay" rules are beginning to bite. A recent claim lodged by an outsourced Tax Office call centre worker could, if successful, force a major reassessment of contractor conditions across the public service. While outsourcing has decreased since 2022, this case underscores the potential for wider ramifications.
In summary, 2026 promises to be a year where the APS grapples with doing more with less, refines the modern workplace, and implements crucial integrity reforms. Public sector leaders and employees alike will need to navigate this complex landscape of fiscal constraint and evolving rights.
