By Julian Bajkowski

Commonwealth public servants flying interstate on business will be forced to sit in economy on many short-haul domestic flights as Finance Minister Penny Wong seeks to squeeze a further $550 million through cutbacks and public service cost reductions.

Senator Wong announced the crackdown on perceived travel perks as part of a wider package of new “efficiencies” that aim to return money to the Budget over forward estimates by cutting recruitment advertising, printing costs and the hiring of contractors and consultants.

The inflated cost of air travel in and out of Canberra has been a long term battleground for the Department of Finance because airlines, particularly Qantas, are able to load significant premiums on the largely taxpayer-funded run.

In a speech to the Australian Institute of Company Directors today, Senator Wong said that “the government will save at least $30 million each year through across the board reductions in domestic and international air travel spending.”

This included moving to a greater reliance on semi-flexible fares instead of pricier fully flexible fares, Ms Wong said.

A spokesperson for Senator Wong said that departments had been set a clear expectation that business class flights would not be booked for short haul flights of less than one hour.

Although travel in and out of Canberra is the obvious target, less clear is whether relatively short flights between Sydney and Melbourne and Sydney and Brisbane are also in scope for the economy class mandate.

Relations between the Gillard government and Qantas have remained strained after the airline left tens of thousands of passengers around the world stranded without notice in October 2011 when it grounded the entire airline in a bid to get the jump on unions planning industrial action.

The deeply unpopular manoeuvre forced the government to intervene in the dispute on the grounds that it would damage the economy, tourism and mining sectors.

Other efficiencies announced by Senator Wong included a revision of government job advertising guidelines “to make online only the default the default position for recruitment advertising unless special conditions apply.” The move has been chalked up as a saving of $2 million.

Departments have also been told to print fewer reports and working papers to reduce the present $125 million spend on ink and paper by $2 million.

However the biggest saving will be made in the hired help department in the form of consultants and contractors who will forgo an estimated $60 million in taxpayer funded work.

“By targeting specific functions and avoiding staff cuts, we believe this this package of measures will characterise the next phase in driving efficiencies,” Ms Wong said.