Abbott's mandarins - Fraser, Lloyd and Thawley - enjoy a frankness their colleagues can't

Judging from the public record, one can already discern some trends. First is a hard-headed concern for staff morale, including pay and conditions, which is a basic tenet of effective leadership in the private sector. Two of the three agencies have settled their outstanding wage negotiations. Staff in the Treasury and the Public Service Commission gained an average increase of 1.5 per cent a year, significantly higher than offers elsewhere and the new pay benchmark.

In each case, the new secretaries were instrumental in securing comparatively generous increases. Fraser, the new Treasury secretary, was reported to have insisted that he be allowed to offer his staff an acceptable deal, despite the government's hard-line stance on wages and conditions across the public service.

Lloyd's approach at the commission is particularly striking. In spite of having carriage of the government's policy of constraining public sector pay and conditions, he oversaw a deal for his staff that was among the most generous so far offered across the APS. In addition to a 1.5 per cent annual increase, commission employees suffered no serious reduction in conditions and entitlements. When questioned publicly about the apparent inconsistency between the commission agreement and government policy, Lloyd was unrepentant. The increases were fully justified in terms of savings already made within the commission and were therefore, by implication, fully in accord with the principles of government policy. (He refrained from mentioning that, as Paddy Gourley has pointed out several times in the Informant, these principles are so porous they can be used to justify almost anything.)

Coalition ministers are therefore mistaken if they think that importing managers with private sector experience will help to screw down public service pay and conditions. On the contrary, managers from a business background will tend to be surprised at the relatively low take-home pay of the highly trained and motivated staff with whom they work each day. They may want to introduce private-sector methods of running organisations, but reduced remuneration will not be on their agenda.

Another notable characteristic of the new appointees is a greater willingness to speak frankly in public. Fraser has been particularly prominent, following the trend established by former holders of his office. His speeches and public comments on economic policy have quickly scotched any suggestion that he may back away from the high public profile and taste for controversy adopted by his immediate predecessor, Martin Parkinson. He did, however, break with recent practice, choosing not to give a set-piece post-budget speech to the Australian Business Economists' annual lunch. Instead, he engaged in a discussion with Grattan Institute chief executive John Daley, a format that allowed him to speak more frankly and informally.

In his public commentary, Fraser has been unafraid to broach politically controversial issues such as the need for tax reform. With his explicit preference for a "lower-taxing country [rather] than a higher-taxing one", he has aligned himself with the Coalition's business supporters and with the government's official policy direction (if not its current actions). Similarly, his calls for a fresh wave of industrial relations reform place him firmly on the Coalition side of the partisan divide.

At the same time, Fraser has not shrunk from openly disagreeing with his political masters. The whole tenor of his economic commentary should be seen as indirect public criticism of the government's refusal to tackle major issues of economic policy. In other, more specific matters, he has also shown he is prepared to give an honest answer to a question even though the Treasurer and the Prime Minister might not wish to hear it. For example, he told a Senate committee hearing that the Sydney housing market was "unequivocally" in a bubble, a diagnosis of rising house prices that both Joe Hockey and Tony Abbott had strenuously denied. Fraser also, on more than one occasion, emphasised that the Intergenerational Report was the Treasurer's document, not the Treasury's. This statement directly contradicted both Hockey and Abbott, who had wanted to give the report added independent authority by attributing it to the Treasury.

Lloyd, as the new Public Service Commissioner, has also been unafraid to speak his mind. Soon after taking up his appointment, he gave a hard-hitting address to the Institute of Public Administration Australia in which he criticised aspects of public service performance, including excessive internal red tape, overuse of "sickies" and stress leave, and the difficulties of managing underperformers. These issues may be perennial but they have rarely been addressed quite so frankly and directly.

In discussion, Lloyd also had a go at freedom of information legislation, which he described as "very pernicious" in its chilling effect on frank and fearless advice. Again, this is a view widely held in the upper echelons of the APS but not usually expressed with such bluntness. (Fraser, too, has voiced regret at how FOI has led to greater reliance on oral rather than written communication, with consequent harm to the quality of advice and decision-making.)

Of the three new appointees, Thawley at PM&C has kept the lowest profile, which is appropriate given his function as manager of the government's policy agenda. Government policy is for the prime minister to announce and defend. There are signs, too, that Thawley may be retreating from the position of quasi-official leader of the APS, a role adopted by some of his recent predecessors, most enthusiastically by Terry Moran under the Rudd-Gillard governments. While the Secretaries Board, which he chairs, has developed some system-wide changes, such as the new flatter management framework, implementation lies with the Public Service Commission. The commission is sponsoring other initiatives, too, such as the policy of encouraging interchange between business and the public service. Thawley appears willing to leave public advocacy of public sector reform to Lloyd as Public Service Commissioner. This would be a useful development, making the commissioner more responsible for policy on the public service, and would underline the continued strengthening of the position of public service commissioner over the past decade.

Though generally reticent in public, Thawley has, on at least one occasion, breached the mandarin discretion usually associated with his office. He told a leadership forum that, after Barack Obama came to power in the United States, China "wasn't ready to take on responsibility economically, politically, or security-wise". A fair comment, perhaps, but hardly diplomatic. Abbott did his best to cover for his senior adviser, while the Foreign Minister, Julie Bishop, clothed a rebuke in the language of lukewarm support, and the opposition spokeswoman scored a few easy points. It was a small indiscretion, but one that could only be made by someone accustomed to speaking frankly.

In general, then, Abbott's new secretaries, particularly Fraser and Lloyd, appear to be untypically outspoken and frank. In many respects, the change is welcome. Informed speeches and comments from senior public servants can help to take public debate beyond the inanities of current political discourse. In addition, blunt and direct language provides a refreshing change from the opaque house style typical of government bureaucrats.

But not all secretaries can afford to take such risks. Abbott's appointees have the confidence of knowing they were hand-picked by the Prime Minister and his chief of staff, who are therefore committed to their success. They have no need to fear a career-ending call from the Prime Minister's office. They are most unlikely, for example, to suffer the fate of former Agriculture Department secretary Paul Grimes, a highly capable official who appears to have been forced into retirement simply for acting with integrity.

Even if there were to be a change of government, their positions would be safe in spite of their current alignment with the Coalition. The ALP, as a point of difference with the Coalition, is committed to retaining all incumbent secretaries. Besides, the private sector will always offer comfortable parachutes to people of their quality and background. So we may enjoy their willingness to speak out. But we cannot expect their less protected colleagues to follow suit.

Richard Mulgan is an emeritus professor with the Crawford School of Public Policy at the Australian National University. richard.mulgan@anu.edu.au