John Fraser’s Treasury exit sparks Canberra chatter

There are plenty in Canberra who wonder whether it was John Fraser’s call to go.

Secretary of Treasury John Fraser appearing at a Senate Estimates at Parliament House in Canberra. Picture: Kym Smith

Treasurer Scott Morrison has delivered on a promise to Phil Gaetjens in his surprise choice as departmental head, given he comes from outside Treasury’s inner circle.

The public policy wonk faces a huge job for an outsider in lifting Treasury’s standing in Canberra and improving its internal morale, which has suffered in recent years.

Gaetjens was packing his bags for a senior OECD post in Paris when he heard the news and the appointment answers his wish to stay in Canberra.

He replaces John Fraser who leaves the post earlier than expected, given he was due to stay until late next year. His surprise resignation comes amid chatter within Canberra he was an absentee landlord.

In contrast to glowing praise from Prime Minister Malcolm Turnbull and the Treasurer there are plenty in Canberra who wonder whether it was his call to go.

Prime Minister and Cabinet chief and former Treasury head Martin Parkinson was reportedly advocating for an internal appointment but the timing of Fraser’s departure was too early for the man considered most likely, deputy Secretary Michael Brennan.

Gaetjens has impeccable political connections, having worked as the chief of staff for both Peter Costello and Scott Morrison.

He is also a fighter, as shown by his recovery from a tragic 2007 accident when he landed in hospital with a fractured skull after being knocked over by hit-and-run driver.

Gaetjens is part of the so-called rat pack, or “micro-economic mafia” who worked under present ACCC boss Rod Sims in PM&C in the late 1980s on micro-economic reform.

The team was responsible form the landmark Hilmer review on competition policy and its members include Peter Harris, who is retiring shortly as head of the Productivity Commission; his deputy and potential replacement Karen Chester; and Department of Agriculture chief Daryl Quinlivan.

Fraser was appointed in 2015 after a stint running UBS Asset Management in Europe, before which he served 20 years with Treasury.

His predecessors including Parkinson, NAB chair Ken Henry and former Westpac chair Ted Evans, all as long-time Treasury staff.

By contrast Gaetjens has worked as head of Treasury in NSW and South Australia, among other roles which arguably make him well placed to run reform from Treasury.

But insiders say the Department needs plenty of care and management and question whether he has the right background for that role.

His deputies, including Brannan, Matt Flavel, Meghan Quinn and Maryanne Mrakovcic all came in the Fraser years.

The head of the Parliamentary Budget Office, Jenny Wilkinson, is one person who may be recruited back to the Department as part of a revamp.

Gaetjen’s background in micro-economic reform, while not straight from the Departmental hymn book, just happens to be ideal for the main job ahead in Canberra — now starting with August’s energy COAG meeting to consider the NEG policy.

That role, along with a strong background in politics and public policy, is just what Gaetjens has trained for.