Scott Morrison makes bad situation worse with appointment of new Treasury Secretary

New Treasury Secretary Philip Gaetjens (right) during his days as Peter Costello’s chief of staff. Photo: Ray Strange.

The sudden departure of Treasury Secretary John Fraser isn’t surprising at one level — he was always Joe Hockey’s man, not Scott Morrison’s. Equally, Fraser has always been free and fearless with his advice, publicly and privately. Colleagues of Morrison who have worked closely with him suggest that the Treasurer isn’t exactly welcoming of advice which contradicts his thought patterns.

But the suddenness of Fraser’s departure is intriguing, having given the minimum notice possible. He departs at the end of the month. The government has had to scramble to find a replacement, and that person is Philip Gaetjens — long term former chief of staff to Treasurer Peter Costello as well as more recently to Morrison.

There goes any pretence that the Department of Treasury is at arm’s length from the Treasurer’s political office.

I’d like to thank & pay tribute to Mr John Fraser for his leadership as Secretary of the Department of Treasury for the last 3.5 years. I also welcome the appointment of Mr Philip Gaetjens as the new Secretary of the Department of the Treasury #auspol  https://t.co/hzbndPTFrO

— Scott Morrison (@ScottMorrisonMP) July 12, 2018

Aside from the erosion of independence this appointment creates, at the very least optically, it’s also a poor political move. Labor and its shadow treasury spokesman Chris Bowen now have the get out of jail card they need every time the department criticises a Labor policy: the head of the department is a former party political staffer to the Treasurer, what do you expect?

For example, Treasury research which unearths costings errors by Labor can be dismissed by Bowen as politicised. Equally, Labor can say optimistic forecasts from Treasury are politicised. I’m not suggesting this will even be the case, but in the world of political spin, Labor now has the arsenal it needs on this front.

It’s one of those cases in which the government might have thought it a good idea to have the closest of allies in the role ahead of MYEFO and an election which will be fought around economic issues, but if the public sniffs a stitch up the move will backfire.

Gaetjens had only just been appointed as Australia’s ambassador to the OECD before pivoting into the treasury secretary role, which suggests that there isn’t a lot of talent the Coalition could turn to. But that’s deeply unfair to the deputy secretaries in Treasury, any one of which was capable of stepping up into the role if the government wanted to preserve the (at least perceived) independence of the department.

New Treasury secretary Philip Gaetjens. Photo: File

Make no mistake, such a politicised appointment is unprecedented. The closest two examples of ex-political staffers rising into the Treasury Secretaryship are Ken Henry and Tony Cole. Both worked for Keating, but neither was his chief of staff. Equally, both had senior careers in Treasury before moving into political offices, much more so than Gaetjens.

Henry only became Treasury Secretary after Keating was neither Treasurer nor PM. Costello appointed him. Cole only worked for Keating for two years and only became Secretary six years later, and for most of the time he was in the role Keating was PM, not Treasurer.

While it is true Gaetjens worked as NSW Treasury Secretary from 2011-2015, that too was post his chief of staff years for Costello. He was appointed under then NSW Treasurer Mike Baird.

Gaetjens — an exceptional political staffer to be sure — only spent four years in Treasury many many years ago, before spending 13 years as a Coalition staffer.

The politicisation of the public service is something political scientists have long lamented, noting that it erodes confidence in the system and reduces the frankness of advice politicians receive, or indeed the frankness of internal advice bureaucrats provide to one another in the formulation of policy.

Morrison has made an already bad situation worse.

Peter van Onselen is a professor at The University of Western Australia and Griffith University.

Correction: An earlier version of this article said when Mr Gaetjens was appointed NSW Treasury Secretary in 2011, it was a “political appointment by a state Liberal government”. The Australian accepts that Mr Gaetjens was appointed to the role on merit after an extensive international search and selection process.