National

Michael Thawley take over sends shudders through public service

New boss: Michael Thawley will be the new secretary of the PM&C.
New boss: Michael Thawley will be the new secretary of the PM&C. Photo: Nic Walker

A surprise personnel change at the summit of the Prime Minister's own department has sent shudders through the nation's senior public service ranks, sparking concerns of more to come as Tony Abbott reshapes the senior executive ranks to better respond to emerging government's priorities.

Leaving: Ian Watt has resigned as PM&C secretary.
Leaving: Ian Watt has resigned as PM&C secretary. 

Former intelligence analyst, diplomat and one-time foreign affairs adviser to prime minister Paul Keating, Michael Thawley, has been promoted to the most pivotal position in the public service as head of the Department of Prime Minister and Cabinet.

The 63-year-old replaces Ian Watt who has resigned and will leave the position at the end of next month just under two years before his term was due to expire.

Sources insist Dr Watt was not pushed and came to the decision of his own accord but Fairfax Media understands he had formed the view privately some months back that he was not the person the Prime Minister wanted to take him through to the election in 2016.

He becomes the seventh top boffin to have either resigned or been sacked since Mr Abbott came to power almost a year ago. 

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Mr Abbott is known to be critical of the growth in numbers at PM&C as the department has come to replicate other departments leading to unwieldiness and unnecessary duplication.

It is a process begun under former Prime Minister Kevin Rudd.

A government source said Mr Abbott hoped to see his department placed on a more "agile" footing noting, however, that Dr Watt had himself begun that process.

This would allow the department to serve the Prime Minister more acutely during times of crisis such as the recent MH17 disaster.

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It is understood the duplication has frustrated the Prime Minister at times, leading him to push for an advisory structure which is more of a co-ordinating agency than a direct provider of in-house experts on all matters.

One insider described the PM as "unfussed" about the rank of the person advising him on matters and more concerned to get the best advice quickly and with the least bureaucratic layering.

Mr Abbott said Mr Thawley, who was appointed for five years from December 1, had already provided significant service to Australia and brought a wealth of experience in the public and private sectors. 

He was Australia's ambassador to the United States between 2000 and 2005, when Australia successfully concluded the Australia-US Free Trade Agreement, ensuring greater access to the US market for Australian products, and was a vital liaison to the Bush administration following  al-Qaeda's attacks. 

Mr Howard wrote in his autobiography Lazarus Rising that as US ambassador Mr Thawley proved "outstanding" with other envoys "drooling at the access he obtained". 

In 2006 media reported Mr Thawley as ambassador to the US had lobbied Congress to drop an investigation into allegations that Australia's wheat exporter paid kickbacks to Saddam Hussein's Iraqi regime.

The AWB investigation was ultimately dropped, despite the US government having information that an AWB wheat contract might have been inflated to cover kickbacks to Iraq. 

During his career, Mr Thawley has held a number of senior Australian government positions, including in the Department of the Prime Minister and Cabinet, the Department of Foreign Affairs and Trade and the Office of National Assessments.

Mr Abbott's statement said, "Most recently Mr Thawley has been senior vice-president of Capital Research and Management Company and of Capital Strategy Research Inc, one of the world's largest investment management businesses." 

In a message to staff, Dr Watt wrote: "I will miss my job greatly but, I suspect, much more than my job will miss me. 

"As to my very future, I have no plans to retire.  I intend to spend a bit more time with my wife, I have a lot of travelling to catch up on and I have a book to write (but not one about government).  I will take a few months off and then see what the future holds for the next stage of my career."

High-ranking secretaries in the federal bureaucracy who served in the previous Labor era of government are slowly leaving the public service.

Treasury secretary Martin Parkinson will leave this year. 

Finance Department secretary David Tune and Attorney-General's Department boss Roger Wilkins resigned earlier this year. 

Just after Mr Abbott won office, he sacked Industry Department head Don Russell, Energy boss Blair Comley and Agriculture secretary Andrew Metcalfe. 

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