Thursday, 20 March 2014

Tale of 3 Treasury Heads

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It’s not a fun time to be a public servant in Canberra. Mounting pressures from an ill-considered hiring freeze paired with squabbles over the merging of different departmental workplace agreements and office space are making it difficult for bureaucrats to keep a clear head, let alone give frank and fearless advice.

Yet three former (or soon to be former) heads of the federal Treasury have reminded us in the past week what a valuable public service bureaucrats can make when they dare to be forthright and bold.

Wombat fancier and tax reform aficionado Ken Henry attracted most of the media spotlight, speaking nearly a fortnight ago to a low-key gathering on competition policy reform at the ANU and then leveraging that engagement into broadsheet column inches and an appearance on the ABC’s flagship current affairs program 730.

Henry’s intervention was considered to be a big deal. Aside from being the Treasury secretary that helped PM Rudd and Treasurer Swann guide Australia through the global financial crisis, Henry worked in different capacities for PMs Keating and Howard with an eye constantly fixed on the changes needed to repair and modernise Australia’s dilapidated taxation system.

Even after he was successful in helping the Howard government implement the GST, Henry identified a raft of remaining reforms for the Rudd government that in his view were still necessary. Rudd famously ignored most of the Henry Review’s findings and botched the implementation of the only recommendation he did accept, which was to establish a resource rent tax on the mining industry.

With the Abbott government promising another review of the taxation system – including consideration of the GST - Henry now seems on a mission to bring his 2010 review back into play.

Much of what Henry had to say about tax reform in the past week or so – such as the need to increase the GST and look at the cost of disability welfare payments – would have been music to the government’s ears and likely seen by any interested observer as a strong objective endorsement of the government adopting such measures.

And yet with honesty and assertiveness can also come difficult and inconvenient messages. During his 730 interview Henry was blunt about Abbott’s shabby treatment of current Treasury head, Martin Parkinson, who will ‘voluntarily’ leave his post sometime after the May budget:

No government has ever thought it appropriate to remove the head of the Treasury and put in someone who is ... of a more comfortable political character.

Henry added that if that is what Abbott intended “that would be a very disappointing move and quite a historic one.”

Parkinson is the same Treasury secretary who boldly issued a media release during the 2013 federal election campaign refuting the basis upon which PM Rudd and his ministers claimed to find a ‘black hole’ in the Coalition’s policy costings. During Senate Estimates proceedings, Parkinson also bolstered the new Abbott government’s case for raising the debt ceiling and defended gloomy economic forecasts in the government’s first MYEFO from claims of political interference.

Even so, Parkinson is far from an acquiescent bureaucrat, recently dropping some timely truth bombs on the counterproductive nature of merit systems for gender equality in the workplace. Parkinson’s observation that men use the merit principle to hide their own biases would have rung uncomfortably true with not only his business audience on the day but a broader cohort of political participants and observers.

To complete the troublesome triumvirate of Treasury heads, former Treasury Secretary and Reserve bank Governor, Bernie Fraser, also delivered some unwelcome facts to the Abbott government in the past week.

In his role as chair of the soon-to-be-abolished Climate Change Authority, Fraser took a break from spruiking industry superannuation schemes to reject extremes at either end of the climate change debate and call for an “informed and mature public dialogue, [as] a necessary precursor to building a broad political and community consensus for climate change policies.”

Acknowledging that his comments may constitute a career-limiting move, Fraser specifically called on governments to initiate this discussion:

… you can’t rely upon the market to deliver cleaner environments and to meet emission reduction targets. They’re things that governments have to do. So it really should be in the interests of governments to bring about, initiate, engineer a more informed, a more mature discussion of these issues. Not carry on with the kinds of assertiveness we’ve seen all around the place on these issues.

So in the past week or so, purely by happenstance, three esteemed former public servants (in the truest sense of the term) have delivered three frank and fearless messages on fundamentally important issues to the Abbott government and Australian voters.

Serendipity aside, the tale of the three (former) Treasury heads reinforces the importance of such objective and independent advice being not only sought but also heeded by political decision-makers.

As funding cuts, departmental amalgamations, and staff losses make the remaining public servants more susceptible to politicisation, role models such as Henry, Parkinson and Fraser remind us all why an independent and forthright public service is so important.

Drag0nista

Drag0nista is a former denizen of the political underworld. She escaped once she realised her own opinions were more important than those of politicians. 

Follow her on twitter @drag0nista

www.dragonistasblog.com