Treasury secretary Steven Kennedy is nursing the economic debate back to health


“I think it’s important to wind down when you go home from work, so I sleep well,” he said. “It’s from my former career as a nurse; I learnt how to switch off after the end of a shift.”

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From dealing with the ailments of a patient, to the aches and pains of the Australian economy, Kennedy won’t be scared into action.

Unlike most other senior public service positions, the role of Treasury secretary has a high public profile. Be it explaining government policy or sitting on the board of the Reserve Bank of Australia, a Treasury secretary has a direct impact on the lives of all Australians even if they cannot name the person. Most wouldn’t know the notes in their wallet contains the secretary’s signature, a daily reminder of his presence (although we won’t see Kennedy’s autograph until next year).

It is also one of the most politically demanding.

Ken Henry, who served both sides of politics during his tenure at the Treasury, came under fire from the Coalition following the global financial crisis and then the tax review which bore his name.

His successor, Martin Parkinson, was a victim of the Abbott government and its disdain for anything connected to Labor’s carbon pricing system. He was pushed from his job (before ultimately returning to head the Department of Prime Minister and Cabinet under Malcolm Turnbull).

Most recently, the appointment of Phil Gaetjens, who had previously been chief of staff to Peter Costello and Scott Morrison as treasurers, provoked rare open criticism by Labor.

By the book

But when Treasurer Josh Frydenberg announced in late July that Kennedy would take over at Treasury, there was a rush of bipartisanship. Both sides of politics recognised Kennedy as a by-the-book public servant.

As one current minister says: “He is the sort of person who will ring you on the weekend to let you know if something is going on,” they said. “You wouldn’t know his politics. He just did the job very, very well.”

Treasurer Josh Frydenberg’s appointment of Steven Kennedy was backed by both sides of politics.Credit:Alex Ellinghausen

The view is similar from the Labor side.

“It was such a good appointment. It really killed our concerns about where the government might head,” they say.

The ability to please both sides of the political aisle says much about his background and how he came to join the Treasury in the first place.

After training and working as a nurse, he took on a cadetship with the Australian Bureau of Statistics. He then moved up through the Treasury before embarking upon a PhD at the Australian National University.

He’s worried about getting a good outcome, not to win an economics competition.

Former colleague of Dr Kennedy

There, he came under the tutelage of renowned Australian economist Bob Gregory.

‘He gets to the nuts and bolts’

Gregory says Treasury and the country have done well with Kennedy’s elevation to the secretary position.

“He’s a nice, smart and well-balanced person who’s achieved excellent outcomes that aren’t ordinary,” he says. “He gets to the nuts and bolts of an issue, he’s thorough, and he wants to find a solution that works.”

His doctoral thesis, entitled The Production of Health: An Examination of the Economic Determinants of Health, looked at whether changes in an economic outcome caused changes in the health of a person.

Steven Kennedy argues that rather than being risk-averse, public service servants need to have "honest conversations" about why a risk was worth taking.

Steven Kennedy argues that rather than being risk-averse, public service servants need to have “honest conversations” about why a risk was worth taking.Credit:Dom Lorrimer

He found a causal relationship between unemployment and mental health, noting that “unemployment significantly adversely affects the mental health of immigrants”. His research also looked at income inequality and health status.

The work points to traits noted by those who have worked with Kennedy over the years.

“He’s worried about getting a good outcome, not to win an economics competition,” one person to have worked with Kennedy notes.

Treasury secretaries are renowned for their intellect, which can rub people the wrong way.

“Steven’s not like other Treasury secretaries. They’ve got egos but not with Steven,” another former workmate says.

Kennedy spent time in the office of then-prime minister Kevin Rudd before being seconded into Julia Gillard’s office to look at ways of ending bottlenecks within government.

Unlike most Treasury secretaries, he has worked in other departments. That’s included time as deputy secretary at the Department of Prime Minister and Cabinet and at the Environment Department, while his most recent job was as secretary of the Infrastructure Department.

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In 2016, he was awarded the Public Service Medal for his work on climate change policy, which included heading the secretariat of the Garnaut Climate Change Review update in 2011.

Last year, in a speech to ANU’s research school of economics, Kennedy drew on that broad experience to reflect on the demands facing public servants where the community and politicians expect 100 per cent accuracy.

He argued that rather than becoming risk-averse, the public service had to get better at having “honest conversations” with the public about why a risk was worth taking.

Again, he came back to his experience outside Treasury and the public service to ground his argument.

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“I have found in my career that the broader group of public servants I have worked with have been just as committed to the public interest as the nurses I trained and worked with more than 30 years ago,” he noted in his speech.

“There is something special about a commitment to public service. But the community is increasingly sceptical and we have to address this scepticism to be effective.”

A nurse for the economy may be just what the doctor ordered.

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