As China’s economy takes on water, Australia needs a steady hand at the wheel to keep our own from sinking alongside that of our largest trading partner. Unfortunately, instead we have Scott Morrison — and Tony Abbott’s ideological purge has left Treasury bereft of wise advisers to help the new Treasurer steer a very flimsy boat through choppy waters.
If one looks at the major export-dependent major global diversified producers — Australia, Brazil, India and Canada — only Australia’s economy survived 2015. So it is with some concern that Australian are noting that the second Coalition government in just two years has appointed a treasurer who has a very limited grasp of economics.
But even that can be overcome, or at least largely ameliorated, with sound advice from both his bureaucratic economic experts and in-house political staffers who can be drawn from existing party staff pools, private enterprise or the relevant department — in this case, the Department of Treasury.
To be fair, the choice of Scott Morrison, a Liberal Party conservative stalwart, to replace the hapless Joe Hockey was motivated as much by a commitment to party stability as it was a political win in mugging Tony Abbott and further shrinking his rump of rusted-on supporters.
But the largely untold story is that Morrison’s very public early and ongoing struggles as the nation’s chief bean-counter go beyond his lack of fluency in the econo-speak and the arcane language of national accounts.
They are an unintended byproduct of ill-thought-out, professionally untenable removal of Treasury secretary Martin Parkinson. Not only did Australia lose a vastly experienced officer in what is traditionally the government’s go-to adviser on all things economic, but Abbott and Hockey, with the whiff of blood in their nostrils, proceeded to shove Blair Comley, the man seen as potentially Canberra’s greatest bureaucratic talent, out the door. That particular carelessness was neatly compounded into another own goal when Comley was almost immediately grabbed by NSW Premier Mike Baird as his own department head.
That’s two generations of Treasury chiefs who had been groomed for the job. Men who know the Australian economy inside out. They say that bad news comes in threes, and so it did with the equally devastating loss of David Gruen, one of the country’s very top macro economists. He was grabbed by Michael Thawley, who returned to head the Department of Prime Minister and Cabinet. As usual, the favourite acolytes in Treasury followed their mentors, and added to a rising sense of despair over Kevin Rudd’s 20% staff cuts. The Australian Treasury is in crisis, but in Canberra no one can hear you scream.
Further compounding Treasury’s denuding was the appointment of John Fraser to replace Parkinson. An Australian who started his career in Treasury, Fraser spent the 20 years leading to his working at UBS one of the clutch of investment banks whose financial engineering was the trigger point for the global financial crisis. Fraser was engaged in his lengthy catch-up program at the very time Hockey, not known for his work ethic, desperately needed around him calming voices of experience and wisdom.
And while personnel losses are always tough, it’s the seismic culture shock to a conservative department of such naked politicisation and interference for specious reasons by a conservative government that will be pervasive. The gormless insouciance authoring an own goal on Australia’s most respected institutions. It has rocked the Canberra bureaucracy to the core, destroying the delicate trust in the always uneasy truce between officials and their officers and crimped ability of public servants to provide frank and fearless advice with no threat of any retribution.
Morrison is presently boxed in by his decisions on staffing his personal office; save for the appointment of former Costello adviser Phil Gaetjens as his chief of staff, his team has largely been retained from his previous portfolio, Immigration. Morrison’s former role is steeped in the more prosaic creation and enforcement of real-world rules rather than the vast complexities of economic policy — the behavioral science behind, and the fiscal and monetary levers that require, considered co-ordination as well as endless convincing and education of the electorate. Not to mention considered, quick responses to the stuttering global economy.
Competent departmental leaders, especially in the key portfolios, are the key to many ministerial success stories. They play adviser, devil’s advocate, sounding board and confidant. They bring deep experience and policy formation experience, balancing the political objectives of the minister.
In allowing his rabid ideological haters to sway him on Parkinson, Abbott arguably sealed Hockey’s fate as a Treasury failure, but his legacy lives on.
In case he did not get the message that any thoughts of a return are utterly delusional, Parkinson’s triumphant return as the nation’s No. 1 public servant as Turnbull’s hand-picked chief of PM&C was Turnbull’s greatest “fuck you” to his predecessor.
So Morrison has come to a very technical, complex portfolio that also requires a fair whack of sales flair.
Australia’s answers to the economic conundrum of what to do from an economic point of view about China has been severely comprised by the gutting of the department responsible, thanks to the collective genius of Abbott and Hockey. Like Australia’s other institutions, and indeed policies, it was slow to grasp that it needed its own views on China. Repeating the view of corporate Australia will not do either.
Turnbull looks likely to be weighed down by lightweight and inexperienced economic advice from Treasury, but while he has Canberra’s best two Treasury officers inside his own department he will have to keep his hand firmly on the economic tiller for now. Not that he probably minds to much.
* An earlier version of this story stated that John Fraser worked for JP Morgan. This has been corrected.
That sinking feeling – Abbott took the plug and Morrison’s the ‘ore.
Ah, Crikey, one of my favourite political photos from 2015 – capturing Morrison warning two thickheads (Abbott & Dutton) there’s an overhead boom mic capturing their idiocy.
Who can forget the hapless Pacific islanders with ‘water lapping at their door’ chuckle chuckle? And then the look of stark fright in Dutton’s eyes. Chuckle chuckle.
The Abbottrocity was only aping (pun not intended) his hero, the Lying Rodent who began the destruction of the civil service concept of “frank & fearless” to today’s lickspittles & incompetents.
How galling it must be for a senior official to have to implement utterly inane policies, for love of tenure & pension.
For someone who is usually worth rereading several times over for his insightful commentary – the sudden lovein for Parkie and all things Treasury would be laughable if it was not so serious. Parkie is just another doctrinaire economist who along with his million dollar mate down at Martin Place has helped hollow out the post-Hawke/Keating brave new world economy.
Welded to their economic ideology neither Parkinson or Stevens have grasped how much the world changed in 2008. The post modern doctrines of economic free markets while still correct in theory are currently suspended from the real world for who knows how long.
Neither did anything to bring the rampant mining boom to heel. Instead they let it rip using a massive surge in the dollar’s value to tame inflation while destroying vast slabs on the non-mining export economy. As reality comes home to roost in the coming years – we will most likely see a rewriting of history and how it was a failure of policies settings at the highest levels that left our economy little more than an empty hole in the ground surrounded by a bunch of brick veneers worth millions of dollars.
There’s no magic bullet to turn around our economy – just years of hard slog and lower living standards as we work our way out of the structural debt and lopsided economy that the likes of Parkie and his entitled mates at Treasury and the RBA have left us with.
A suggestion for Tony Abbott’s grave stone.
“Never in the history of Australian political conflict was so much owed to so many by so few.”
or: “The Turd’s progress, the nation’s regress.”