In this form – an appeal to his patriotism – it was an offer Fraser felt unable to resist. But it had been a huge adjustment, from the high-octane world of power and money in merchant banking in the City of London to being "a small cog" in the tranquil pastures of the national capital with the power only to provide advice for others to act on.

Fraser says he didn't appreciate just what he was taking on when he accepted Abbott's offer. "Being overseas, you don't follow things back in Australia so closely," he says. "So I didn't realise what a Horlicks the 2014 budget was. It had been handled very badly. The hangover from that had affected policymaking." And, he says, it still does.

It is typical of Fraser, who in July finished his three-and-a-half-year stint as Treasury secretary, that he has no qualms about bagging the work of the people who hired him. Fraser is a classic "tell it as you see it" person, confident of his own judgment and intolerant of dissembling. He says the fallout from the 2014 budget continues to make more difficult the government's task of getting Parliament to pass essential policy changes and reforms posing risks to the economy and Australia's competitiveness.

"It's hard yakka," he says. "The amount of time ministers now spend getting policy changes through the Parliament is inordinate. [Paul] Keating would argue that it wasn't the case, but to some extent, in the '80s, there was bipartisan support for economic reforms. That is much less so now. Big compromises have to be made to get good policy through. It's sad."

Doubts about staying

In fact, Fraser confirms that just months after his return to the Treasury in January 2015, he had serious doubts about whether he wanted to stay in the job. When Abbott hired Fraser he told him that his job was to "try and make Joe Hockey a good Treasurer". But less than nine months later, Abbott and Hockey had both lost their jobs.

Fraser had never met his new boss, the incoming treasurer Scott Morrison, and ahead of their first meeting he contemplated advising him to look for a new secretary for the department.


"You know, going back from a situation where I basically ran my own life, to have all these public servants running around and with the political situation the way it was, I just thought 'god mate, you're getting on. There's a lot of seas to sail and other things to do.'"

But stay on he did. Perhaps it was the lingering feeling of Abbott's index finger poked in his chest that caused him to hang in there. As secretary of the Treasury he went on to sit in the front row on three federal budgets, advise on the creation of a shock bank levy, oversee unprecedented interventions to deflate the housing market, and help steer the economy towards its 27th year of uninterrupted expansion.

Unprecedented private-sector appointment

Fraser's return to the Treasury was anything but the return of the prodigal son. His predecessor, Martin Parkinson – a career public servant, widely respected in Canberra – had been dumped unceremoniously because he was seen as too close to the Labor Party. Because of this, Fraser's appointment was also seen as political.

Treasurer Joe Hockey and Treasury Secretary John Fraser outside the Treasury building in Canberra in 2015. Supplied

It was unprecedented for a Treasury secretary to be chosen from the private sector – albeit that he had been one of the key bureaucrats involved in the sweeping 1980s economic reforms. As a deputy secretary advising on macro-economics, he was one of the senior bureaucrats in a very muscular Treasury used by Keating to transform Australia.

There were other things that made for a bumpy return. The Treasury itself had changed dramatically. A new generation of Treasury officers had risen to senior positions in the two decades since Fraser had left in 1993. Fraser admits he felt old when he realised that some of his staff were the children of Treasury officers he had worked with in the 1980s.

To some of the young guns, Fraser was a blast from the past, from a world that had been left behind by the evolving and changing challenges of public policy. To younger officers, Fraser appeared to be, as one put it, "a relic from a bygone era".


Influenced by alpha-male years

Fraser had his professional character formed in the days of strong, male role models under the Treasury Department leadership of the redoubtable Fred Wheeler and acerbic John Stone. He was there for the exhilarating, action-packed, alpha-male years of Paul Keating's reign. Keating addressed women as "love" and Fraser still refers to female staff as "the ladies". Both regarded courtesy – such as opening doors and standing aside at lifts – as good male manners.

Fraser with then treasurer Scott Morrison in 2015. Peter Braig

In a more gender-balanced era, some Treasury officers found Fraser's old-fashioned ways to be politically incorrect and patronising. Not that this phased him. His response to criticism has always been to give as good as he gets – and then to move on.

Fraser can be refreshingly self-deprecating. In an interview with The Australian Financial Review Magazine soon after he returned to the Treasury, he described himself as capable of being "a real prick" in his dealings with people. He ran into early resistance to his attempts to make the Treasury get out into the "real world', instead of sitting behind desks writing minutes – and his response was of the "real prick" kind.

"I had a chap who could not comprehend that I wasn't at the desk every day," Fraser recalls. "And, finally, I said to him: 'My friend, where's the steering wheel?' And he said: 'What do you mean?' I said: 'Where's the bloody steering wheel? Because I'm getting the impression you think I lock it into the desk and steer the building through the shoals of Canberra.'"

Contradicted Joe Hockey

Fraser's preference for blunt speaking over bureaucratic restraint made life occasionally uncomfortable for the government. Just a few months into the job he ruffled feathers when he contradicted Joe Hockey about the state of the housing market. Fraser backed the Labor Party's case that there was a housing "bubble", despite Abbott and Hockey insisting that house price increases were a good thing.


John Fraser had his professional character formed in the days of strong, male role models. He was there for the exhilarating, action-packed, alpha-male years of Paul Keating's reign. Keating addressed women as "love" and Fraser still refers to female staff as "the ladies". Daniel Munoz

"I was right about that," Fraser says now. "Blind Freddie could see there was a bubble. And I think policy was adjusted appropriately, to cool the housing market. I think what we are seeing now is the result of the work APRA did [to limit interest-only loans]. First-home buyers are getting a chance to get into the market."

Fraser also brought to the job a sceptical view about the retail banking sector – and about the role of central bankers. He believed the big Australian banks had an essentially easy business model and bankers were too prone to leaning on government. He had no problem when the government lent the other way, and imposed a bank levy in the 2017 budget.

He also believes that central bankers have a pretty cushy job. He thinks the Reserve Bank has more people than it needs and points out – with a wry smile – that the RBA has 1400 staff compared with the Treasury's 850. He told the Financial Review recently that Reserve Bank board meetings that he attended, where the cash rate has been untouched since September 2016, were a bit like repeats of Gone with the Wind. "It's three-and-a-half hours long and you know that in the end Atlanta is going to burn and that Clark Gable will tell Scarlett O'Hara that, 'Frankly, my dear, I don't give a damn.' And then we have lunch."

Treasury work more complex

By contrast, he argues that the work of Treasury had become "massively more complex" in the two decades that he was absent from it. Fraser says fiscal policy is "a harder grind" as the scope for cutting spending gets ever narrower. But also, the ever-increasing complexity of policy areas such as foreign investment, taxation policy, financial regulation and structural change had massively increased the demands on Treasury.

This was why the staffing level of the Treasury had been increased from 600 to 850, he says, and why he had gone to the private sector (including his former employer UBS) to bring in people with expertise in these areas. Warren Hogan – hired by Fraser in 2016 to be principal adviser in a newly created Sydney office of the federal Treasury and now industry professor at the UTS Business School – says the most important thing Fraser did in the job was recruit good people from the private sector.

Fraser returned to a very different Treasury to the one he had left in the early '90s, Hogan says. Its power and influence had waned, both because the policy agenda had changed and because there were many more sources of economic policy advice. But he says Fraser increased Treasury's relevance as outside hirings influenced internal changes such as the creation of a structural adjustment branch, sharpening skills in areas such as tax policy, financial markets, foreign investment and corporate governance.


"A lot of Treasury processes were not best practice," Hogan says. "Fraser brought a different approach which I think has been beneficial. He also wanted to put Treasury back at the centre of the economic policy debate and I think he made great headway on that."

Regrets? 6 of them

Fraser is not someone prone to deep self-reflection, nor to dwelling on the past. Asked if he has any regrets, he says he wished he had not run six marathons. "Did terrible things to my body," he says. That was a thing when he was in the Treasury first time around. In those days, public service offices in Canberra evacuated at lunchtime as hordes did the so-called "two bridges run" – a lap around a circuit framed by the Commonwealth and Kings Avenue bridges which span Lake Burley Griffin. Fraser was a keen jogger, and still runs occasionally.

Fraser says of his successor, Phil Gaetjens: "He is a good man, and will be a good secretary. He has been treated terribly." Elesa Kurtz

At 67, he looks in rude health and says he is enjoying life immensely. Health was not a factor in his decision to quit the Treasury. "It's very simple," Fraser says. "There's no great secret. I just wanted to do something new. At the end of the day, I don't want to be the richest guy in the south-east corner of the cemetery. I have been lucky and done well. There is a lot I still want to do – as I said, I want new adventures."

Since he returned to Australia he has bought a farm, a wheat and sheep property in south-west Victoria, managed by his son. Although he grew up in working-class, inner Melbourne, Fraser says he loves rural Australia – and has a strong view that the agricultural sector has huge potential to grow on the back of demand from China and India.

He also believes regional Australia should accommodate a growing population and urges significantly increased investment in better infrastructure to encourage population flows to regional centres. He says the Treasury erred in the 1980s when it shot down proposals for increased spending on infrastructure. "For a country of our size, our population is not optimal," he says. "I think it's not the quantum but the quality of immigration which is important.

"If we're going to have high levels of immigration, or sustained levels, we have to encourage people to settle elsewhere than Sydney and Melbourne. So we have got to have the right infrastructure. Not just roads and trains and bridges but also schools and hospitals. It is a holistic thing."


Private v public sector cultures

By having two public service careers, separated by a long career in the private sector, Fraser's working life has been a blending of cultures which he believes better serves both government and business. In stark contrast to the public service code of never openly talking about your personal views and philosophies, Fraser is bluntly clear about his.

"There is no greater capitalist than me," he says. "I can't think of any part of the Australian economy that won't benefit from more competition … or the world economy."

But he adds a qualification: "Capitalism has a duty to do the right thing and I will not defend capitalism when it becomes egregious and does the wrong thing." He cites the financial sector and the wealth management industry as examples where effective regulatory oversight of private industry is an essential public good.

Fraser says the argument over whether or not there should have been a banking royal commission "is past history". But there could be no argument that the inquiry had revealed "a culture which has been suboptimal, to say the least. Clearly some things went wrong, in the way clients were treated. That needs to be remedied."

Fraser says he wished he had not run six marathons. During his time at Treasury, public service offices in Canberra evacuated at lunchtime as hordes did a lap around Lake Burley Griffin. Fraser was a keen jogger, and still runs occasionally. Megan Dingwall

He agreed to his first post-Treasury private sector appointment – as a member of the board of AMP – because he wanted to play a role in seeking those remedies and because he believed AMP chairman David Murray had a good plan for restoring the trust of customers. And he says repairing the culture in the financial sector is becoming more urgent because "the whole financial area is going to become even more in need of good conduct because we are all getting older and will need good financial advice".

Economy in good shape


Fraser leaves the Treasury confident that the Australian economy is in pretty good shape. "As they say, 'I picked my timing'," he says. And he thinks it will be in good hands with Phil Gaetjens, his successor.

Fraser played a key role in choosing Gaetjens, whose appointment has been strongly criticised because he is seen as a political appointee, having until recently been Scott Morrison's chief of staff. Opposition Treasurer Chris Bowen all but said he wouldn't work with him, should he win office. "There are good and fine executives in the Treasury who are up to being a secretary, but they've been passed over for an inappropriate political appointment," Bowen said. Fraser says Gaetjens is "a good man, and will be a good secretary. He has been treated terribly."

In his search for new adventures, Fraser says he wants to do "pro-bono" charity work. He did some in Britain, for the Help for Heroes organisation which provides support for disabled former British soldiers. "Mind you, that cost me the most expensive shout ever," says Fraser, who is someone happy to spend leisure time at the bar, having good conversation and enjoying a fine whisky.

"I got a good lesson in life from those soldiers. I always felt annoyed with myself that these blokes had been wandering around without a leg, or half a face, or an arm and they never complained. They had this beautiful, dark sense of humour.

"I was at a function for them and I complained; I had pulled my Achilles tendon running, and said, 'Oh, boys, do you mind if I sit at the bar on a stool because my leg is killing me.'

"It cost me a fortune. 'Oh, Johnny's got a sore leg. Poor Johnny,' they said. And, of course, I ended up buying the bar. That night there was no whisky that was too expensive. That really brought it home to me."

As we talk, Fraser's mobile buzzes from time to time but he ignores it. Then it rings so he picks it up and checks who is calling. "Headhunter," he says, as he puts the phone down again without answering.

John Fraser at his home in Melbourne. His first post-Treasury private sector appointment is as a member of the AMP board. He also wants to do "pro-bono" charity work. Josh Robenstone

And then, with a grin, he adds: "I feel loved."

The AFR Magazine Power issue is out on Friday October 5 inside The Australian Financial Review.

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