The Abbott Government will slash up to 1500 bureaucrats from the Defence Department as part of a wider historic cull of the Federal public service.
The Weekend West _believes Tuesday's Budget will result in between 1000 and 1500 jobs being axed in Defence and a major review set up that will probably end in more job losses in the long term.
The cuts will not affect uniformed military personnel.
Confirmation of cuts at Defence came as Treasurer Joe Hockey announced 3000 jobs would go in his own portfolio - fuelling fears the Government is positioning to implement deep job cuts across all major departments.
About 21,500 civilians work in the Defence Department.
The Government's Commission of Audit was scathing of waste and staffing structures in Defence, complaining the organisation had become "complex and top heavy".
It found that since 2000 the number of public service senior executives in the department had grown 63 per cent.
The number of deputy secretaries had risen from four to 14 over the same time.
Expected to be heavily targeted for cuts is the Defence Materiel Organisation, the body charged with buying military hardware worth billions of dollars.
The Abbott Government is committed to lifting Defence spending to 2 per cent of Australia's gross domestic product.
The Treasurer has flagged cuts to more than 200 government programs and said 3000 people would be retrenched at the Australian Taxation Office.
Unions warn tax office cuts could lead to more tax evasion.
"If you cut 3000 jobs in the ATO, that will damage their capacity to help small business, help industry and ensure we raise tax revenue appropriately," Community and Public Sector Union national secretary Nadine Flood said.
Immigration Minister Scott Morrison yesterday announced a new homeland security agency - to be known as Australian Border Force - by rolling together parts of Customs and Department of Immigration and Border Control.
Jobs losses are likely in both departments as back office operations are merged.
Mr Morrison says the combined agency will result in "hundreds of millions in savings" but the money will be ploughed back into the ABF.