Public Sector Informant: Labor sharpens its knives for Phil Gaetjens ... and others?

Shadow treasurer Chris Bowen said Labor could have no confidence in a Gaetjens-led Treasury and, if elected, would not accept any incoming brief Gaetjens had prepared.

Since then, Labor has kept up the attack on Gaetjens in particular and the Treasury in general for compromising public service impartiality and independence. Bowen's recent complaint on supposed Treasury costings of opposition policies is the latest salvo.

Labor's opposition to the blatant partisanship in Gaetjens' appointment is understandable, but its extravagant polemic threatens to undermine the party's credibility as a defender of an impartial, professional public service.

For example, on the issue of alleged Treasury costings of Labor policies, both Bowen and Bill Shorten expressed outrage not only at Treasurer Josh Freydenburg but also at the Treasury's alleged connivance in its own politicisation.

Bowen wrote to Gaetjens and the secretary of the Department of the Prime Minister and Cabinet, Martin Parkinson, asking whether the Treasury had been costing the opposition's policies, a practice that would compromise the department's independence and impartiality.

But Bowen knew too well what the answer would be, having been treasurer himself six years earlier. Back then, Bowen and prime minister Kevin Rudd had claimed official backing for costings of opposition policies and were immediately slapped down in an open letter from Parkinson (the then Treasury secretary) and other senior colleagues.

This time, the result was identical and predictable. Gaetjens gave the standard reply that the Treasury responds only to government requests to cost particular policies, as part of its service to the government of the day. It does not specifically cost another party's policies as such. In his letter, he also quoted directly from Parkinson's letter of six years earlier, making exactly the same points. If Bowen had hoped to land a punch on Gaetjens, he failed.

Admittedly, there is little effective difference between costing a policy taken directly from the opposition and costing the same policy when asked to do so by the government. The request through a minister is something of a fig leaf, to protect public servants from working directly on opposition policies.

But what is wrong with a treasurer asking the Treasury to cost such a policy? A common defence is that both sides have done it. This is true, but beside the point. Both sides also pour taxpayers' funds into government advertising for flagrantly electoral purposes, but that doesn't make it more justifiable.

Some commentary seems to suggest the Treasury secretary, if he or she were truly independent, should refuse to do the costings, presumably on the ground that policies supported by other parties are off limits.

But the principle seems absurd and unworkable, particularly if applied beyond Treasury costings to other portfolios and ministers.

Is a minister to be barred from asking his or her department to assess the merits of a policy once an opposition party advocates that policy? Or is the Treasury uniquely to be preserved from such contamination?

Some of Bowen's rhetoric in favour of restoring the Treasury's supposed independence wrongly suggests the Treasury should have a special, arm's-length relationship with government, not unlike that of the Reserve Bank. The Treasury certainly needs to provide objective data and analysis but it remains a standard department under ministerial control. As such, it must take its directions from the government of the day.

Objecting to Treasury costings seems disingenuous, particularly under current arrangements. Opposition parties now have access to their own costings from the Parliamentary Budget Office during the parliamentary term, and from the Treasury and Finance Department secretaries during the caretaker period.

Labor has also used Senate estimates hearings to question Gaetjens' impartiality. It zeroed in on political advice that Gaetjens had given as chief of staff - for example, on the banking royal commission - implying this was incompatible with his current position as Treasury secretary.

Presumably not for want of trying, Labor has not unearthed evidence of Gaetjens acting in a partisan fashion since he became secretary. It has concentrated instead on the supposed contradictions between actions taken in his two distinct roles.

The assumption seems to be that a public service professional cannot move from being a partisan political adviser to being a politically neutral public servant without compromising public service neutrality.

Again, as a general principle, the argument is mistaken. Indeed, many expert commentators on the APS say that more interchange between departments and ministers' offices would benefit both sides.

Does every public servant who spends time in a minister's office thereby run the risk of later being pilloried by the minister's political opponents?

Admittedly, Gaetjens' transition was an extreme case and would not have been countenanced by a government that had any respect for the appearance of public service neutrality.

It flows from the Coalition's long-standing conviction that it has the right to appoint politically acceptable secretaries as a countermeasure to what it sees as the APS's in-built, left-wing bias. It also reflects Morrison's obvious contempt for "the Canberra bubble" and the values its denizens hold dear.

Nonetheless, anger at the decision should not be allowed to lead to reckless, misguided attacks on Gaetjens himself. He is essentially a career public servant, having joined the Bureau of Transport Economics in 1977 and spent most of his career in public service roles in Canberra, as well as in the South Australian and NSW treasuries.

While he spent considerable time as chief of staff for Coalition treasurers - 10 years for Peter Costello and more recently for Morrison - he returned in between to senior policy roles in the Treasury and interstate.

Whether such a career should disqualify one for the position of secretary is a moot point. But that he has acted professionally since taking over as secretary should surprise no one. Bowen's flagged refusal to accept an incoming brief from Gaetjens' Treasury, should Labor win the election, seems petulant.

The dispute over Gaetjens' appointment and the alleged politicisation of the Treasury has wider ramifications for Labor's general approach to secretary appointments.

Since the Rudd government's election in 2007, Labor has consistently taken the moral high ground over retaining incumbent secretaries when winning office. It has rejected the Coalition's practice of sacking secretaries - such as Parkinson, Blair Comley, Don Russell and Andrew Metcalfe, who were thought to favour policies the Coalition rejects.

Respecting the tenure of secretaries has been a key plank in Labor's support for a professional public service. The party is now backing away from that position. Bowen's intemperate attacks make it very difficult for Gaetjens to survive.

More broadly, as both Shorten and the party's spokesman on the public service, Jim Chalmers, have made clear, the party is now refusing to give any incumbent secretary a commitment to continued service.

Shorten has promised no "night of long knives" but would make no specific guarantees on the spurious ground that Labor hasn't won the election yet (an argument that would rule out any election promises). This is a clear departure from former policy.

That Labor should now retreat on this front is not altogether surprising, particularly since the retirement of both Rudd and senator John Faulkner, Labor's elder statesman and champion of honest government.

In the long run, the policy would only have succeeded if the Coalition had been prepared to follow Rudd's lead and offer bipartisan commitment to incumbents. Instead, the Coalition doubled down on its right to replace incumbents and appoint its own preferred candidates.

Moreover, the poisonous partisanship of the Abbott years, which still lingers, despite some relaxation under Malcolm Turnbull, has guaranteed that any voluntary rapprochement on this issue, along with many others, is further off than ever.

In such an adversarial climate, Labor has decided there is little to gain, and much to lose, from surrendering the power to exact retribution.

The best hope for safeguarding the tenure of secretaries, and thereby strengthening the APS's independence, is not through voluntary restraint, which has failed, but through legislative change.

David Thodey's ongoing independent review of the public service, which will report to the newly elected government, could provide an opportunity.

It is exploring "options for greater rigour and transparency for any proposed termination of secretaries, while retaining the prime minister's legislated role to make recommendations to the governor-general". It is also looking at the more formal use of panels in appointments.

If Labor wins the election, such proposals would offer it a way to entrench its principles without yielding advantage to its opponents.

On the other hand, if the Coalition wins, the changes would require a rethink of its approach to the APS's leadership.

At some point, however, conservatives must come to realise how much they depend on a competent, professional public service, whose foundations they need to protect, not undermine.