Ken Henry

Kenneth Ross Henry (born 27 November 1957) is an Australian economist and public servant who served as the Secretary of the Department of the Treasury from 2001 to 2011.

Ken Henry studied economics at the University of New South Wales, graduating in 1979.

After, he lectured in economics at the University of Canterbury in New Zealand while studying for his Doctor of Philosophy degree at the same institution.

That package contained as a central element a goods and services tax, similar to both the Option C developed by Henry for the Hawke Labor government in 1985, and the GST developed for the Howard Liberal Government in 1997.

Henry rejects the claim that Treasury acted improperly, saying "We rejected that charge at the time. I would always reject it. There was nothing improper in what we did."

He did concede, however that "it is the case that our work was used by the Government to attack publicly an Opposition policy."

In reference to the Option C modelling he had previously worked on, Henry said:

"It was like 1985 all over again. But in other ways it couldn’t have been more different … …But it was completely unlike 1985 in the sense that we were not helping the Government to develop a positive package. Kerin had never said to the department, 'I’m going to use this to monster Hewson’s tax package when he gets it out.' Although he’d never said that, we knew, obviously, what it was going to be used to do. We knew that Hewson’s package was going to include a broad based consumption tax, the thing which in 1985 we were helping the Government to design. So you could say that our hearts were not in the job. But we nevertheless had an instruction from the Government. 'You do it'."

When Fightback!

came out, the model the team had developed enabled the identification of a major failing in the package.

Income tax bracket creep had been used to fund the package but bracket creep had not been used in the analysis of the after tax income various taxpayers would receive.

Treasury was accused by the Coalition of having acted improperly.

From September 1986 to June 1991, Dr Henry worked as a senior adviser to the Labor Treasurer, Paul Keating, providing advice on taxation policy and administration, retirement incomes policy, industry policy and microeconomic reform (including telecommunications reform).

In June 1991 he returned to the Treasury, becoming head of the Microeconomic Modelling Unit.

In July 1992 he took up the position of Minister-Counsellor (Economic and Financial Affairs) in the Australian Delegation to the OECD in Paris.

During this time, he has served as an Australian representative to the Organisation for Economic Co-operation and Development (1992–94).

He was the Treasury department secretary from April 2001 until March 2011; and therefore an ex-officio member of the board of the Reserve Bank of Australia.

In 2004, Henry recommended a National Emissions Trading Scheme to thwart climate change, however the advice at the time was ignored.

His recommendations have since been praised.

Ken Henry has been criticised for his role in modelling the Hewson Liberal opposition reform package known as Fightback!.

Henry remained head of Treasury in the transition from Liberal to Labor Governments in 2007.

In April 2007, the Australian Financial Review's Laura Tingle ran a story about Henry's semi-annual speech to staff.

In the wake of the Howard Government's development of an A$10 billion policy proposal, Henry was reported as saying that there was a 'greater than usual risk of the development of policy proposals that are, frankly, bad' in the lead-up to the federal election.' Former Howard Government ministers suggested that it was a deliberate attempt to have Henry's critical views aired publicly to the detriment of the Howard Government, and called it 'a deliberate piece of political positioning by Henry' prior to the 2007 federal election.

Following the initial controversy, Henry released the full text of the speech, along with clarification.

It said, in part, that:

"The Government, our ministers and other agencies are under no compulsion to rely on our advice. In respect of water, that point is all too obvious. We are competing for influence with other central agencies, line agencies and independent policy advisers, such as think-tanks, commentators and consultants.... As I have noted on other occasions, I have never known the Treasurer to not welcome frank and honest advice when it is provided in-confidence and in good faith."

Immediately prior to Henry's appearance at a Senate hearing into the Rudd Government's unlimited Bank Deposit Guarantee Scheme, an email from the Governor of the Reserve Bank of Australia, Glenn Stevens, to Henry was reported on in the media.

No text was published, however the Australian newspaper alleged that the email expressed concerns of the Reserve Bank about a 'flight to safety' caused by the unlimited guarantee of deposits in Authorised Deposit-taking Institutions, and the consequent loss of liquidity in secondary credit markets.

It claimed that Stevens called for a cap on the amount of a deposit guarantee ‘...the lower the better' and that he also said 'If this situation is allowed to continue, foreign bank branches will not be able to source funding in the local market as a flight to guaranteed deposits occurs.'

In the Senate hearing, Henry denied there had been any disagreement between Treasury and the Reserve Bank, and that the two bodies were ‘of one mind’ on the Bank Deposit Guarantee Scheme.

Henry said that the Opposition's claim that Mr Rudd had ignored Reserve Bank warnings was based on a report in The Australian newspaper.

Dr Henry called that report unfortunate, fallacious, unhelpful, and "W-R-O-N-G"

The Reserve Bank Governor backed Henry, stating that "steps in these directions, in the context of what other countries were doing, were sensible, and the RBA supports them."

Treasury, under Henry, gave advice supporting the Rudd Government's stimulus package, which was designed to lessen the size of an economic recession in Australia following the global financial crisis.

The package has been described by Nobel Prize–winning economist Joseph Stiglitz as 'one of the most impressive economic policies I've seen, ever'.

In 2008 he headed Australia's Future Tax System Review Panel, charged with examining all aspects of the Australian tax system with a view to reform.

During his time as Secretary of the Treasury, Henry chaired the major Future Tax System Review, which became known as the Henry Tax Review, a document published in 2010 which is credited with shaping Australian tax policy over the following decade.

He retired from the civil service in March 2011, and weeks later was appointed Special Adviser to Prime Minister Julia Gillard.

During his time in this role, he chaired the committee which produced the White Paper on Australia in the Asian Century.

He left his role as Special Adviser in 2013, and became Chairman of the Australian Securities Exchange, Chairman of the National Australia Bank, and joined the Sir Roland Wilson Foundation at the Australian National University.