Despite having been under seemingly constant attack from the Coalition for the last three years, Ken Henry served most of his time as Treasury Secretary in the Howard government, having been appointed in 2001 and reappointed in 2006.
That was before he blotted his copybook in the eyes of the Liberals by telling colleagues about how shoddy the policy process within that Government had become, referring specifically to the Howard-Turnbull back-of-the-envelope Murray-Darling Basin plan.
He was right, of course — as his boss Peter Costello confirmed in his memoirs, when he described just how little commitment to fiscal rigour John Howard had in his last years.
But Laura Tingle ran Henry’s comments at the time and uproar ensued. Henry lost his performance bonus that year, reflecting not merely the flaws of the Public Service performance pay system but the spectacularly petty bastardry of which Howard was capable.
Kevin Rudd quietly and wisely ditched performance pay for Secretaries when he became prime minister.
It was on Rudd’s watch that Henry performed his greatest service to the nation. He had worked in Paul Keating’s office through the boom of the 1980s and into the savage recession that followed. He had seen, first hand — indeed, been a part of — an historic failure by Australian policymakers: a recession that, coupled with the Government’s embrace of micro-economic reform and the failures of state-owned banks, gouged deep holes in our social fabric that took a decade to repair.
Treasury’s response to the impact of the GFC, coupled with that of the Reserve Bank, made amends for that failure, to the extent that anything ever could. They stabilised our banking system, kept credit flowing, and launched two waves of stimulus that put a floor under falling consumer confidence and employment. Henry’s advice to Rudd and Swan “go hard, go early, go households” was the playbook for a spectacular policy success, mitigated only by some terrible implementation of one stimulus program by the Department of the Environment. But hundreds of thousands of Australians have jobs that wouldn’t have them if Henry, Stevens and their teams had repeated the errors of the late ‘80s and early ‘90s – chiefly using the levers of monetary and fiscal policy too late and ineffectively.
Between that and Henry’s work on the GST — first for Paul Keating in the Hawke years, then the real thing under Peter Costello — he can lay claim to having been present at most of the key moments in recent Australian economic history.
Those hundreds and thousands of Australians remain entirely oblivious to their fate if Henry and Stevens hadn’t got it right. Few of them would know who either was. Indeed, as is the way of things Henry’s reward for this remarkable feat — not achieved anywhere else in the world – has been froth-mouthed abuse from conservatives, who first insisted stimulus wouldn’t work and then insisted it wasn’t necessary when it did work, none of them apparently equipped with the slightest understanding of or interest in the social and economic impacts of unemployment.
It didn’t help that Kevin Rudd and Wayne Swan insisted on using Henry and “the independent Treasury” — a completely misleading description of an APS department, no matter how eminent — as a sort of human shield against criticism through their response to the GFC. And Rudd and Swan only turned out to be fair-weather friends. Having commissioned Henry to undertake a comprehensive tax review — although not so comprehensive as to include the GST — the government rejected most of its recommendations and so badly bungled its implementation of those it did accept that it lost a prime minister and nearly an election.
The Coalition seemed to take Henry’s performance personally. Senators lined up at Estimates hearings to take pot shots at him, invariably embarrassing themselves. Joe Hockey appeared at one stage to suggest Henry was for the chop if the Coalition won the election, something he later backed away from. But Coalition staffers were less diplomatic. “Henry will be the first against the wall,” one told Crikey last year.
The second to be disposed of, according to that staffer, was Martin Parkinson, whose crime appeared to be arguing in favour of the emissions trading model developed by his Department. Parkinson now, of course, will replace Henry back at his old department. He’ll be replaced at Climate Change and Energy Efficiency by another public face of the CPRS, Blair Comley.
Several other changes are afoot. Another Henry Review alumnus, Jeff Harmer, is retiring, as expected, and being replaced as Secretary of FAHCSIA by Finn Pratt, who moves from Human Services (he was associate secretary — an increasingly common position under this government — at DEEWR before that). Pratt is replaced at Human Services by Kathryn Campbell, who was briefly at DEEWR as well this year but more properly regarded as from Finance, where she led the Budget and Financial Management Group for five years under both governments.
Glenys Beauchamp, who since the government was returned has been acting head of the new Regional Australia, Regional Development and Local Government Department, has been made permanent in that role. But the other acting appointment from September, that of Paul Grimes at what used to be Environment and which is these days called Sustainability, remains in place. Robyn Kruk remains notionally attached to that role, but is on sick leave.