Thank you, Tony for that kind introduction. And thank you to all of you who have joined us on this chilling Canberra morning. This is my first address to IPAA – and I want to take the opportunity to acknowledge the work that IPAA does to connect us all – to step away from the day to day that demands so much attention and to focus on issues that are relevant for the whole of the public service.
And I join Tony in his acknowledgement of the Traditional Custodians of the land on which we gather today, and pay my respects to Elders past and present. In a city like Canberra, we spend a great deal of time thinking about how knowledge is captured and transferred and how we work together to effect change.
First Nations Australians have been doing this for tens of thousands of years – maintaining enduring cultures and communities through periods of profound change while sustaining a deep connection to Country and to one another. It is a reminder that some of the most important lessons come from your lived experience.
I was wondering what to cover in this address, and had a look over a number of previous secretary’s addresses. Some secretaries have used this forum to broaden an understanding of the work of their agency. But I figured that you all have a pretty good understanding of the work of Treasury and an even closer understanding of the work of the Department of Finance. So, I hope you will be relieved to hear that I am not going to provide any remarks on the intricacies and challenges of budget processes (including BPORs or DTBNYAs) or the ongoing need for offsets.
I thought it would make more sense to share with you some of my reflections on leadership.
I joined the public service nearly 20 years ago, after having spent around a decade at the Reserve Bank, 2 years doing further study overseas and around 7 years out of the work force when our kids were young.
I joined a team in the Department of Prime Minister and Cabinet that was working on climate policy. I was fresh to the Commonwealth, I was on a steep learning curve, and I thought – like all central bankers – that good policy was essentially a matter of good ideas. Find the right answer, make the argument clearly, and the rest would follow.
Climate policy disabused me of that notion fairly quickly.
Of course, good ideas matter. But what I encountered was a problem of striking complexity.
The science was contested in the public domain even when it was agreed by an overwhelming majority of experts.
The economics were genuinely difficult, with significant distributional consequences and temporal dimensions that reasonable people weighed differently.
The stakeholders ranged from industry groups defending existing investments to civil society groups representing people who would bear the costs of both action and inaction.
And the politics shifted constantly — including within a single parliamentary term, with external events such as the millennial drought and the Global Financial Crisis having a material impact on the climate debate.
Working on climate policy between 2007 and 2013 taught me things about the public policy craft that I have carried with me ever since.
I have now spent 4 years being Secretary — 3 leading the Department of Finance, and just over one leading the Treasury.
The past 4 years have involved assisting government deal with a range of issues that they confronted — from managing the energy shocks associated with the invasion of Ukraine and the most recent Middle East crisis, to grappling with the implications of generative AI that burst onto the scene in December 2022.
And these past 4 years have involved advising on and implementing reforms on the spending and tax side, as well as advising on a range of regulatory reforms such as establishing a digital ID system.
This experience has reinforced in my mind the fact that governments spend a lot of time dealing with things they didn’t plan for, and that how the public service responds in those moments matters a lot.
It has also reinforced with me that while genuine, durable reform is one of the hardest things a democratic system attempts, the public service has an irreplaceable role in making it possible.
And it has taught me what effective leadership in the public service looks like.
Those are the 3 things I want to talk about today – managing the unexpected, shaping and progressing reform, and what both of these means for leadership in the public sector.
Managing the unexpected
I want to start by talking about managing the unexpected because I think we often underestimate how important this is.
Every government arrives in office with an agenda. Usually an extensive one. They have made commitments, they have priorities, they have a mandate — and they have every right to expect the public service to focus on delivering their commitments.
But no government gets to govern across only the things it planned for.
Over the course of a term – sometimes in a single year – a government will face things that were not in anyone’s platform document.
Over the past 15 years, these have included the global financial crisis, the COVID-19 pandemic, heightened geopolitical tensions, natural disasters, High Court decisions. These shocks invariably have many dimensions and disrupt many aspects of government and the community simultaneously.
And of course, there are also the sector-specific shocks that demand immediate attention and consume enormous institutional energy. Dealing with fraud, dealing with delivery failures, dealing with issues that emerge within the particular sector you are responsible for.
These events are not interruptions to the work of government – they are part of it. And how the public service performs in those moments is a true test of its capability.
I have lived through several of these in my career. The global financial crisis tested our economic institutions and the financial sector – in particular – and highlighted the risks of contagion across globally integrated financial markets.
COVID was different in character and broader in its demands on the public sector. It was an event of extraordinary scope, that unfolded so rapidly, and required decisions that affected millions of people before we had anything like complete information. The pressure on the public service during those years – between 2020 and 2022 – was sustained in a way that a single crisis event rarely is. It tested not just our capability but our institutional resilience.
And the still unfolding Middle East crisis has tested our response capabilities once again.
I have learned a range of things from those experiences, and from the various sector-specific crises that are the constant companion of any senior public servant.
The first is that institutional composure is a form of leadership. When things are moving fast and the stakes are high, the organisation looks to its leaders for a signal about how to respond. You need to stay calm, focused, and clear about what you are trying to achieve, to create the conditions for everyone else to perform as effectively as possible in the circumstances.
But you also need to be responsive to the situation. You need to increase the cadence of discussions with key people, move quickly to establish teams (albeit often temporary teams) to best manage the situation, and make it clear within the organisation that you are looking for a change in posture. You can’t wait for the uncertainty to resolve or for enough information to be available to make these changes.
It’s easy for people to get lost in the fog of a crisis. In my experience, organisations need quick clarity on governance and accountability (the who and the how) to give them space to focus on the critical issues such as the policy response.
In COVID, I remember clearly the decision that we made in Treasury to establish a COVID coordination team and a new JobKeeper Division very early in the crisis. It was well ahead of when staff across the department had come to a view that this was necessary, and ruffled feathers because it forced more internal contestability and changed accountabilities and responsibilities across the department. But with hindsight I don’t know how we would have managed without these 2 key structural changes.
The second thing I learned is that managing the unexpected well requires you to maintain 2 things simultaneously: the capacity to deal with the crisis in front of you, and the capacity to keep delivering on everything else. This dual burden is one of the most under acknowledged aspects of public service work. In a crisis, the spotlight is on the response.
But the rest of the portfolio doesn’t pause. Ministers still need advice. Programs still need to run. The department still needs to operate. It is important to explicitly acknowledge this, and be open with the organisation about how, as a leader, your time or availability is being affected by the crisis and where others will need to step up.
Organisations that handle this best are usually the ones that have built deep bench strength – not just a few exceptional people at the top, but genuine capability distributed through the institution, who are used to operating with authority. And these are organisations that are also adept at having conversations with ministers about the trade-offs that the new circumstances present.
The third thing I learned is that crises, if managed well, can bring out the best in the public service. People rise to the challenge, genuine collaboration blossoms, and there is a stronger commitment to shared problem solving. Of course this works best if leaders explicitly acknowledge the imperative of the situation and both authorise and raise expectations about working differently.
A well-managed crisis response leaves few visible traces. When done correctly, you see a situation that didn’t deteriorate further. A set of decisions that reflected sound judgement. A program that held together under pressure. These are not the stuff of headlines – the headlines will still focus, with the benefit of 20-20 hindsight, on what could have been done differently if we knew how everything would unfold.
But managing crises well are the substance of what good public administration looks like in practice. And I think we should be more willing to name that, and to take pride in such successes, while still be willing to learn from the things that didn’t go so well.
Shaping and pursuing reform
The second thing I want to talk about is reform, specifically the role of the public service in shaping and pursuing reform.
This is an important topic, not least because it is one where I think the public service sometimes undersells itself.
Let me start with what I think is the most fundamental point. One of the most important things a public servant can bring to a government is a clear, evidence-based view of what improved policy would look like in their area. Not just an understanding of the current settings. Not just a map of the stakeholders and their interests. But a genuine intellectual position on what would work better, and why.
You need expertise to deliver this. You need people who understand the policy area. You need people who have frameworks for defining the issues and potential solutions. And you need people who can clearly articulate to decision makers both the policy problem and options for the way forward.
I have been surprised, over the course of my career, when public servants lack these skills. They understand the policy details and politics of their portfolio deeply. They know who the difficult stakeholders are and how to manage them. They are skilled managers.
But they have not done the hard thinking about what genuinely better policy looks like. So, when a government opens the door to reform they have little to offer beyond what they already know has been committed to.
Part of our job – an important part – is to always be ready with an answer to the question: what should we do next, and why? And in my experience, decision makers in all governments I have worked for have been keen to hear our views.
The second thing I want to say about reform is that you have to be pragmatic. The public service exists in a real political and fiscal environment, and the advice we give has to reckon seriously with that.
There is no prize for producing technically elegant reform proposals that have no prospect of being adopted. What matters is the best achievable outcome – not the best theoretical one.
This requires a mature judgment about where you should advise government to flex and where to hold a line. I learned this across all of the reforms I have been involved with. The core reform direction was clear, but the details were negotiable. This judgment is hard to teach. It develops with experience. But the principle is simple enough: don’t let the perfect be the enemy of the good.
The third thing I would observe is critical to reform is the evidence base. Good reform advice depends on good evidence, and I think we should acknowledge and celebrate that our capacity here has genuinely improved. The development of integrated data assets – as well as access to new and novel data sources – has given the public service analytical capabilities that we simply didn’t have before. It has enabled us to move beyond an aggregate macro story to being able to see patterns, trace outcomes and build arguments that were not available to our predecessors. That is not a small thing. It represents a real shift in what we are capable of bringing to these discussions, and we should use it.
In the context of the most recent tax reforms, Treasury has worked hard to use integrated longitudinal datasets in new ways – to demonstrate the lifetime income impacts of reforms, rather than taking a much narrower one-year snapshot of the data. Thinking creatively about how integrated data sets can inform policy discussions is a new opportunity for the public service that we need to build the skills to exploit effectively.
In this day and age, with social media, mis- and dis-information and a 24-hour news cycle, significant reform is hard and requires political commitment. And I don’t think there is any single model for how reform should be undertaken or how to build support for reforms. Different reforms in different contexts call for different approaches.
What we have control over, as public servants, is the quality of the advice and analysis we provide to government. We need to be open to the wide range of ways we can develop considered and evidence-based advice. We need to think carefully about what sort of analysis will be most influential in the policy debate and most impactful when government is making the case for the reforms they wish to pursue.
Finally, I want to raise something that I think is genuinely unresolved for our profession.
When the public service explains the evidence base for a reform, there will be people who interpret that as advocacy. And the uncomfortable truth is that they are not entirely wrong. If you present evidence that clearly supports a particular policy direction, and you do so in a context where that direction is being contested, you are not a neutral actor.
I don’t think the answer to this is for the public service to go silent. That would be a dereliction of our responsibility in working for the government of the day, and it would serve no one well – not the government, not the public, not the quality of policy debate. The answer, I think, is for us to be clear about what the evidence shows.
In Treasury, for example, we often get caught in debates about modelling – what it says and what it proves. We should be honest that no model is all-seeing and all-knowing. All analysis involves assumptions which are contestable. But modelling should reflect our best considered expertise and judgement, and these days modelled estimates of impacts are critical to effectively mount the case for reform.
At the end of the day, as you all know, governments own reforms. They are elected to make these decisions, and they are accountable for them. But our job is to give them the best possible foundation to do that – and then to support them in implementing their reforms with full professional commitment.
Leadership
Let me now turn to leadership, because I think it is the foundation on which a lot depends in our organisations.
Over the course of my career, I have thought a lot about leadership, and my views have definitely evolved. There are 3 things that I observe effective leaders focus on.
The first is empowering their teams and organisations to perform as well as they possibly can. This sounds obvious, but it is surprisingly easy to get wrong.
For people who have come up through the technical ranks – and many of us in this room will have – or for people who are risk averse, there is often a powerful temptation to remain the expert in the room. To pull decisions back toward yourself. To treat your own judgment as the one you are most comfortable with. That instinct might even be correct in the short term, but it is corrosive over time. It signals to your organisation that you don’t trust them. It creates bottlenecks.
And it prevents the development of the next generation of capable, confident people who will do this work long after you have moved on.
Empowering an organisation means being clear about the mission, including how you want it undertaken, and then getting out of the way. But at the same time remaining as engaged as necessary.
It means creating the conditions – particularly the culture – in which talented people can do their best work. It means trusting people to use their judgement about when decisions or advice needs to be escalated. It means ensuring people know that you will back them in if and when things go wrong (as they inevitably will from time to time). It means establishing an environment where people know that they can raise issues and they will be listened to – and work out how you can respectfully agree to differ. The culture that is set from the top-down matters.
The second thing I have learned as a leader is that you need to know when to dial up the heat. Empowerment is not abdication. There are moments in every organisation’s life when the situation demands that you step forward and drive outcomes hard – when the stakes are high enough, the timeline tight enough or the stakes of getting it wrong serious enough that you need to apply direct, sustained pressure.
The skill is in reading the moment correctly. Apply too much heat too often and you undermine the very culture of autonomy you have been building. Apply too little at the critical moment and the organisation drifts, or worse, fails to deliver for government. This is a judgment call, and there is no particular formula for it.
In my observation, the leaders who do it best are usually the ones who have been very deliberate about when they choose to step in, so that when they do, people understand it means something.
The third thing I have learned about leadership — and this is the one I feel particularly strongly about – is the importance of maintaining deep technical credibility in your policy domain. Not just managerial competence. Not just process expertise. But a deep, current understanding of the substantive issues your organisation works on.
I think about this particularly in the context of those early years I spent on climate and then on superannuation, and of course it is relevant to the current tax debates. Working on problems that were complex, with many competing interests and many technical elements, forced me to build a kind of intellectual policy rigour that has served me well.
It forced me to understand the economics, the alternative perspectives and the opportunities that were presented. To engage seriously with modelling and evidence as well as stakeholders. To hold my own in conversations with other public servants, with industry, with ministers – not by pretending to know everything, but by knowing enough to make the best judgements and ask the right questions.
I think, one of the most important things a senior public servant can do is stay close enough to the substance of your work that you can carry the policy argument. The public service’s value to government depends on it being a genuine source of independent, high-quality advice. That requires leaders who are intellectually engaged.
Closing – a call to the profession
I want to finish where I began – with that version of myself who arrived 2 decades ago, assigned to climate policy, believing that good ideas were enough.
What I know now that I didn’t know then is that this work is harder than it looks from the outside. It requires technical depth and political acumen. It requires the capacity to operate under sustained pressure without losing your judgment. It requires a willingness to give advice that is honest, robust and pragmatic and to listen to other views and perspectives with an open mind.
None of that is easy. But it is what the public service is for.
So, to those of you earlier in your careers: I encourage you to build your technical depth deliberately. Don’t be satisfied with understanding the politics of your portfolio – understand the substance deeply enough to have a genuine view about what better looks like. Resist the pull toward safe, hedged, all-sides advice that protects you personally but leaves the decision-maker no better positioned than before they asked for advice.
To those of you in senior roles remember that the culture you build is as much a part of your legacy as any policy outcome. The organisation you lead will take on the character of the standards you hold and the behaviours you model. If you want a public service that gives honest, robust and useful advice a generation from now, you need to create those capabilities in your teams today.
Climate, super, fiscal and tax policy taught me that the hardest problems don’t get solved in a single term, by a single government, or by a single generation of public servants.
They get solved by institutions that maintain their integrity over time – that keep showing up with rigour, with evidence and with a genuine commitment to the public interest even when it is challenging to do so. And with a capacity and commitment to work effectively with the government of the day.
That is what we come to work every day to do. And when I reflect on my career in the public service, that is why it has been, and continues to be, so rewarding and satisfying.
Thank you.