Finance Minister Mathias Cormann is set to announce cuts to 175 government agencies. Source: News Corp Australia

Finance Minister Mathias Cormann will announce the cuts on Monday as part of the budget update alongside rules to stop the creation of new agencies that clog the bureaucracy and slow down decisions.

It says working groups will be shut down and expensive agencies dismantled in a bid to streamline the public service, saving more than $500 million over four years and taking staff numbers back to the levels of seven years ago.

The agencies to be cut include the Australian Government Solicitor, with some of its staff transferred to the Attorney-General’s Department and bizarre committees including a “governance board” on computer systems and a “partnership group” on student services.

Treasurer Joe Hockey and Finance Minister Mathias Cormann announced the first stage of budget cuts in May. Source: News Corp Australia

Senator Cormann named the departments of health and education as two of the priorities for further work on streamlining the bureaucracy and told The Weekend Australian it would “identify any legacy programs that are no longer a high priority, identify barriers to performance and look for opportunities to reassign limited resources to better deliver on higher policy priorities”.

It was also reported that some agencies will be forced to share their “back-office” functions while the government will consider outsourcing a huge communications network that links 400 sites and more than 80 agencies.

“This will ensure that taxpayer funds are spent wisely and efficiently and not wasted inside departments,” Senator Cormann told The Weekend Australian.

Finance Minister Mathias Cormann, with Defence Minister David Johnston, is set to take the razor to government bureaucracy. Source: News Corp Australia

The first stage of the “smaller government program” was launched in May when Senator Cormann closed down 76 agencies and sold government owned property including Defence Housing Australia, the Royal Australian Mint and Australian Hearing.

This next phase will take the total number of entities abolished to 251 with savings expected to reach $539.5 million over four years.

“Our focus is on ensuring that the administration of government is as efficient and as effective as possible,” Senator Cormann told The Weekend Australian.

“This means a more streamlined, accountable and responsive public service, without unnecessary overlaps and duplication.”