The word is Ken Henry was Peter Costello’s choice – the rest of the cabinet wanted someone else. But fair enough, the minister should get the appointee they want and Costello got Henry. So what’s he saying now?
Usually the government would be able to harness the prestige of Treasury to hammer out a compromise. But Treasury is not seen as independent and trustworthy on this tax. The thoroughly misleading graph purporting to show taxes fell as mining profits rose in the past decade originated in the tax review led by Ken Henry.
And here lies the problem. The serving secretary of the Treasury should never have been asked to decide on tax policy options. The government should have understood that once it decided policy the Treasury would have to settle the detail – maybe in some cases re-engineer it – and would need to be respected and disinterested about implementation.
I think we can safely say the Rudd government have cashed in Treasury’s reputation.
The working relationship between Costello and Henry probably worked quite well. From his KGB interview Costello respected Henry’s tax acumen, and his ability to argue both sides of tax issues. There seemed to be a delineation between tax and broader economic issues.
Now, can you imagine Swan engaging Henry in an argument ? This is part of the problem, and as a result Treasury now looks partisan. Actions (or is that non-actions) in regard to the Grech affair, and Henry’s publicised opinions about constitutional issues, and the way he is seemingly unchallenged in Senate Estimates hearings is not a good look.
Frank and fearless advice is one thing. Pontificating on matters beyond your area of responsibility are quite another.
Keith
9 Jun 10 at 10:03 am
Yes, that’s the irony, Costello said he gave Henry the job because he is a tax specialist. Now the tax specialist has discredited Treasury to a reasonable degree.
pedro
9 Jun 10 at 4:58 pm