Robodebt architect Kathryn Campbell was rewarded for cooperating with the Coalition government's policy agenda with key appointments, a former top bureaucrat told the royal commission.
Renee Leon, the ex-secretary for the Department of Human Services, revealed her relationship with Ms Campbell became strained after being elevated to the senior position in 2017.
She told senior counsel assisting Justin Greggery that she thought Ms Campbell was rewarded for being "responsive to the government's policy agenda"
Ms Leon's public service career ended in 2019, due to a Morrison government machinery of government shake-up.
She is now the national president of the Institute of Public Administration Australia.
"I thought that the abolition of my department to bring it under the Department of Social Services was probably a reward for secretary Campbell for having been more responsive to the government than I was," she said.
"I don't think I was alone in thinking that her elevation to the role of the secretary of the Department of Foreign Affairs and Trade was a very big reward for someone who had no background in diplomacy."
"So I think it was seen as being a reward for being very cooperative with the government, not only probably about this but about a range of matters."
Ms Campbell served as DFAT secretary between July 2021 and July 2022, and is now under the defence portfolio in an AUKUS-related role.
As the service delivery agency for the Department of Social Services, Ms Leon said when issues arose in the delivery of programs "there was sometimes, I think, regrettably, and unnecessarily, a desire to attribute blame".
Senior counsel assisting Justin Greggery asked Ms Leon whether increasing difficulties within the relationship had a "limiting effect" on communication between the two secretaries in 2019.
"I was always aware that I had to be careful about how I raised issues with Ms Campbell," Ms Leon responded, adding that neither she or Ms Campbell displayed "unprofessional behavior".
"I was aware, not only from my own observations, but also from matters that other people raised with me, that at times when I wasn't present, it was possible things were being said about me that were designed to undermine my reputation with the minister."
Ms Leon alleged that Ms Campbell was "encouraging and actively supporting the development" of plans by former government services minister Stuart Robert to break the Department of Human Services into four separate service delivery agencies.
She was not supportive of the project, modelled off the example of Service NSW, believing it would have a "very considerable impact on service delivery".
"How would the implementation of that concept, the broad proposal affect the functions of DSS if at all?" Mr Greggery asked her.
"Well, it didn't develop far enough to know what would have happened about that, but I believe that it's what led to the plan that was eventually implemented, which was to make the Department of Human Services, a subsidiary agency, under the Department of Social Services," Ms Leon said.
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