In a major overhaul of the Australian Public Service, the prime minister has announced that federal government departments will be reduced from 18 to 14 and five secretaries sacked.

From February 1, four new departments will be created and Services Australia will become an executive agency.

Prime Minister Scott Morrison said the changes would ensure services are delivered more efficiently and effectively to Australians.

“Having fewer departments will allow us to bust bureaucratic congestion, improve decision making, and ultimately deliver better services for the Australian people,” he told reporters at a press conference on Thursday morning.

“It will break down the silos. It’ll ensure that important policy challenges, in which different parts of the public service are working on, can work more effectively on together.”

Mr Morrison refused to rule out job cuts, saying it would be matter for the secretaries, who would be expected to “realise maximum efficiencies” in the running of their departments.

“I expect, frankly, all departments secretaries to be realising maximum efficiencies for how they run their departments every single day of the year,” he said.

“That’s their job. That’s why they’re paid to do what they do and I expect them to continue to do that. And whatever decisions they take over the next 12 months, two years, five years, they’ll take those decisions.”

Mr Morrison said the dramatic changes were “entirely consistent with the thrust of” David Thodey’s independent review of the APS, which he would comment on next week.

New departments

The Department of Education and the Department of Employment, Skills, Small and Family Business will merge to form the Department of Education, Skills and Employment.

“This is about having a continuity from the day you walk into school to the day you walk into a job and beyond, and ensuring that in your job and over your life, we understand that there is a continuous education,” the prime minister said.

“Education doesn’t start and stop when you leave school. It goes on over your entire life.”

The Department of Infrastructure, Transport, Cities and Regional Development will merge with the Department of Communications and the Arts to form the Department of Infrastructure, Transport, Regional Development and Communications.

Other departments will merge with functions of existing departments.

The Department of Agriculture will join with the environment functions of the Department of the Environment and Energy to form the Department of Agriculture, Water and the Environment.

The Department of Industry, Innovation and Science will consolidate with energy functions from the Department of the Environment and Energy and small business functions from the Department of Employment, Skills, Small and Family Business to form the Department of Industry, Science, Energy and Resources.

“Microeconomic reform is a big part of our economic reform story,” Mr Morrison said.

“Much of the work that has been done in business deregulation and deregulation more broadly will fall into these areas and will be supported by the programs which are about getting people’s energy costs down.”

Services Australia will be established as a new executive agency within Social Services.

Departure of five secretaries

Five secretaries will lose their jobs, including Secretary of the Department of Employment, Skills, Small and Family Business Kerri Hartland and Secretary of the Department of Human Services Renée Leon.

Leader of the opposition Anthony Albanese said the changes were about centralising power.

“We’ve seen that writ large, on the floor of the House of Representatives. We’ve seen it with the removal of five departmental secretaries,” he told reporters at a press conference.

Melissa Donnelly, National Secretary of the Community and Public Sector Union, said slashing departments was not the way to go.

“The Prime Minister is wrong if he thinks slashing departments is going to improve services to the community,” she said in a statement.

“If Scott Morrison was serious about making sure Australians can rely on government services, he should stop gutting jobs and lift the ASL cap.“

The prime minister also announced the expansion of the North Queensland Livestock Industry Recovery Agency to include drought.

This will provide drought support to farmers and regional communities and assist in recovery from the north Queensland floods.

The New North Queensland Flood Response and Recovery Agency will be led by Shane Stone AC QC and will sit within the Department of the Prime Minister and Cabinet, reporting to David Littleproud, the Minister for Water Resources, Drought, Rural Finance, Natural Disaster and Emergency Management.

The new structure of departments and secretaries will be as follows:

• Department of Agriculture, Water and the Environment – Andrew Metcalfe
• Attorney-General’s Department – Chris Moraitis
• Department of Defence – Greg Moriarty
• Department of Education, Skills and Employment – Dr Michelle Bruniges
• Department of Finance – Rosemary Huxtable
• Department of Foreign Affairs and Trade – Frances Adamson
• Department of Health – Glenys Beauchamp
• Department of Home Affairs – Michael Pezzullo
• Department of Industry, Science, Energy and Resources – David Fredericks
• Department of Infrastructure, Transport, Regional Development and Communications – Simon Atkinson
• Department of the Prime Minister and Cabinet – Philip Gaetjens
• Department of Social Services – Kathryn Campbell
• Department of the Treasury – Dr Steven Kennedy
• Department of Veterans’ Affairs – Ms Liz Cosson