The federal government's return to budget surplus relies in part on an unrealistic expectation of a smaller public service, an analysis by the Parliamentary Budget Office says.
About 40,000 public servants would need to be culled by 2036-37 - along with slashing the National Disability Insurance Scheme and allowing bracket creep to drive up tax revenues - to bring the budget back to balance, the independent budget watchdog said.
In a report published on Tuesday, the PBO pointed to the budget papers' forecast decline in the proportion of GDP to be spent on public sector expenses like wages, contractors, travel and general running costs, while agencies had to find savings to stay within their budgets.
