Melbourne's Royal Children's Hospital is blaming Federal budget cuts for the loss of 50 jobs.
The hospital says it has lost $3.6 million in Federal funding this financial year as part of the Commonwealth's revised contribution to Victoria's health budget.
Twelve staff were made redundant this week and another 38 will go.
Half of the losses would come from existing vacancies not being filled and the remainder would be redundancies and redeployment But the Prime Minister Julia Gillard is blaming the State Government.
"Our funding is going up $900 million," she said.
"The Victorian Government's funding is going down by more than $600 million.
"Of course Premier Baillieu is desperate to get away from political responsibility for that $600 million cut, so he has been representing to hospitals that somehow this is all about the Federal Government." Ms Gillard says the Federal Government is giving Victoria more money for health than it's ever given before.
"I'm happy to be judged by increasing Victorian funding for hospitals and health," "I'm happy to be judged by making more money available to Victorian hospitals then has ever been available before," she said.
The hospital's Chief executive Christine Kilpatrick says the job cuts would be disruptive, but the hospital had no choice, given the unexpected budget cut.
"The positions are all non-bedside clinical roles, so there is no impact on the delivery of clinical care," she said.
Professor Kilpatrick said a combination of measures taken since the funding cuts were announced in mid-December would save $2.5 million.
She said the hospital treated the sickest children and those with the most complex medical conditions in the country, and it had a responsibility to keep beds open and to maintain the capacity of its emergency department.
"This is a difficult time for our staff, but we don't have a choice around whether or not to act," she said.
The Australian Medical Association's Stephen Parnis says the Commonwealth and State Governments must resolve the funding issue as soon as possible.
"It does show how parlous the budgetary situation is, not only for the kids, but these decisions that are being made in every hospital executive around the State at the moment," he said.
Last year, the Federal Government used new population data to strip Victoria of $107 in expected health funding over two financial years (2011-12/2012-13).