ScoMo tripped up
The treasurer’s hand-picked secretary is already in hot water
The escalating controversy over the surprise appointment of Treasurer Scott Morrison’s former chief of staff, Phil Gaetjens, as Treasury secretary now threatens to reduce confidence in the federal public service, and undermine the government’s attack on Labor’s proposed abolition of cash refunds of unused franking credits. The government repeatedly accuses Bill Shorten of picking the pockets of those well-off retirees, so integral to the Coalition base, who benefit from the cash refunds. Redacted freedom of information documents uploaded by Treasury on Friday, and reported by Fairfax Media, suggest that Treasury shared Labor’s concerns about the rising cost of the refunds to the public revenue. Shadow Treasurer Chris Bowen has reacted [$] angrily, hinting strongly that Gaetjens will be sacked if Labor wins the next election, which would make him the shortest-lived secretary ever. Score: partisan politics, one; good government, nil.
Phil Gaetjens has, undoubtedly, a solid CV. However, he has spent 13 years as a political adviser to Liberal treasurers – Morrison since 2015 and, before that, 11 years for former treasurer Peter Costello. In between, he had a stint running the New South Wales Treasury, appointed by the O’Farrell Coalition government in 2011. Gaetjens’ appointment to the federal Treasury – okayed by the prime minister – was a surprise, because he had only just been announced as our new ambassador to the OECD, based in Paris. Obviously the government had not seen the retirement of current secretary John Fraser coming. Labor denounced Gaetjens’ appointment immediately as the latest instance of the politicisation of Treasury under the Coalition, and as such it joins a growing list that started when Tony Abbott as prime minister dismissed Martin Parkinson, the first time ever a Treasury secretary has been sacked.
Earlier this month, The Australian’s David Uren described [$] Gaetjens as “a polarising figure, seen by many – even inside the Coalition – as a political warrior for the Treasurer”. Also in The Australian, John Durie wrote [$] that Gaetjens had wanted to stay in Canberra and Morrison had “delivered on a promise” by making him head of the department. Durie described him as a member of the rat pack or “micro-economic mafia” who worked under Australian Competition and Consumer Commission boss Rod Sims in the prime minister’s department under Hawke and Keating.
In this glowing profile [$] in the AFR, Gaetjens recalled that era fondly as “the best time I had in the public service … Real stuff was done.” He complained about the media’s tendency to define people by who they worked for, and described himself as being “more at the policy end of the spectrum than the political end”.
Morrison sprang to Gaetjens’ defence with a partisan flourish, saying “Phil Gaetjens knows more about putting budgets together and running economic policy than the entire Labor frontbench combined.” Former PM&C secretary under Kevin Rudd, Terry Moran, said that Gaetjens should be given a chance. Bowen is having none of it, particularly after Fairfax Media’s Eryk Bagshaw reported yesterday evening that “protected” FOI documents showed that Treasury had concerns about the surging cost of dividend imputation before Labor announced its policy to claw back refunds of franking credits.
In response Bowen has called for the release of all the policy documents, and also strongly hinted that Labor could not trust Gaetjens, who pulled together material to attack Labor’s dividend imputation policy. “It’s just the latest in a growing list of examples of Scott Morrison and the Liberal Party politicising and attempting to wreck Treasury’s reputation as Australia’s preeminent economic policy department,” Bowen said. “It will inevitably fall to a future Labor Government to restore the Treasury to its rightful place as a central policy agency.”
The Gaetjens appointment is not an isolated example, but comes alongside appointment of Michael Brennan (who was chief of staff to South Australian senator Nick Minchin when he was finance minister) as chair of the Productivity Commission, and Simon Atkinson (Finance Minister Mathias Cormann’s chief of staff) as deputy secretary in the Treasury fiscal group. Describing it as a “full-scale political row”, The Mandarin points out the string of contentious on-merit appointments are “another elephant in the room” for former Telstra chief David Thodey’s review of the public service. Politicisation of the public service feels like a long-running trend: impossible to stop, and something that has been going on for decades under governments of both stripes. As Ross Gittins wrote this week: “My greatest fear is that the next Labor federal government will use this bad precedent to behave the same way, thus making the politicisation of government departments and supposedly independent agencies bipartisan policy. What a great step forward that would be.”
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Paddy Manning is contributing editor (politics) at The Monthly and has worked for the ABC, Fairfax, Crikey and The Australian. He is also the author of three books, including a recently updated unauthorised biography of Malcolm Turnbull, Born To Rule?
The escalating controversy over the surprise appointment of Treasurer Scott Morrison’s former chief of staff, Phil Gaetjens, as Treasury secretary now threatens to reduce confidence in the federal public service, and undermine the government’s attack on Labor’s proposed abolition of cash refunds of unused franking credits. The government repeatedly accuses Bill Shorten of picking the pockets of those well-off retirees, so integral to the Coalition base, who benefit from the cash refunds. Redacted freedom of information documents uploaded by Treasury on Friday, and reported by Fairfax Media, suggest that Treasury shared Labor’s concerns about the rising cost of the refunds to the...