A defender of the Iraq war, who also saw off an inquiry into the AWB scandal, the new head of the Department of the Prime Minister and Cabinet will nonetheless be willing to ask the tough questions. By Hamish McDonald.

Former diplomat Michael Thawley takes top govt job

Australia’s  top public servant, Michael Thawley.
Australia’s top public servant, Michael Thawley.

If Tony Abbott is to emerge from the political hole he found himself in this week, much will depend on the guidance of the man he has just installed as his Sir Humphrey Appleby, heading the powerful Department of the Prime Minister and Cabinet.

Although Michael Thawley looks the part − a stern mandarin, always fastidiously dressed in a well-cut, conservative suit − his advice will be much more forthright than the elliptical suggestion that a rash decision would be “courageous”.

Thawley has worked closely with two of Australia’s toughest and most ambitious prime ministers, Paul Keating and John Howard, and is unlikely to be overawed by Abbott and his ministerial colleagues. He will, however, always remain cool-headed and scrupulously follow protocol.

Those who have worked and debated with him in the corridors of power refer to his mental independence and directness. “His great strength is that he is not a static thinker,” says Jacob Heilbrunn, a senior editor with the American realist foreign policy journal The National Interest, who got to know Thawley during his stint as ambassador in Washington. 

“He can call people’s bluff and say, ‘What do you really mean and does that actually hold water what you are saying?’ A lot of times people in those positions don’t really bore down. He has indefatigable energy and intellectual curiosity.”

“Independence of mind” is also what occurs to Allan Gyngell, a former head of the Office of National Assessments (ONA), now at the Australian National University’s Crawford school of public policy, who worked closely with Thawley over 30 years. “He’s also extremely good at what he does,” Gyngell adds. “He’s a very effective public servant.” 

Any run-ins with Abbott are more likely to be on pragmatic grounds than ideology, however. Thawley, now 64, is a deeply conservative man, from upbringing and experience. The son of an Anglican clergyman, he was schooled at Geelong Grammar, and after an honours degree in history at the Australian National University joined the diplomatic service.

A posting in Moscow during the last years of Leonid Brezhnev’s leadership in the early 1980s was pivotal in forming his outlook on security. “I don’t think there was any mystery about his views,” Heilbrunn said. “It came from him having witnessed communism firsthand: the corruption, deprivation, lack of human rights and bellicosity that he saw when he was stationed in the Soviet Union. That is the genesis of his hardline foreign policy views. Overall he is quite conservative.” 

Two stints in ONA followed, broken by a short posting in Tokyo when Japan was acting as the “unsinkable aircraft carrier” aiding the United States’ strategic squeeze on the Soviet Union that would have only deepened that attitude.

Under Keating, Thawley then moved to the Prime Minister’s Department to head its International Division, a small outfit that has steadily grown to rival the Department of Foreign Affairs in its control of policy. This was at the prompting of Gyngell, who had moved from the same role to that of foreign policy adviser in Keating’s office. It seems that despite Thawley’s posh image and background, the prime minister thought highly of him. “Keating regarded him as a completely trustworthy and straightforward official,” Gyngell says.

Indeed Thawley was closely involved in preparing the controversial security treaty that Keating signed with then Indonesian president Suharto in 1995, a document John Howard derided as an “utter irrelevance” four years later when Australia and Indonesia came close to armed conflict over events in Timor-Leste.

By then, Thawley had moved onto Howard’s staff as his foreign policy adviser, while another former Keating staffer, diplomat Ashton Calvert, had become the secretary of DFAT. It was a remarkable feat of political survival when many other senior officials were banished for perceived Labor sympathies.

Thawley and Calvert were the chief authors of the famous “Howard letter” sent to the Indonesian president, B.  J. Habibie, in late 1998 after chaos and economic collapse had forced Suharto’s resignation. The Timorese saw this as their moment to break free from 33 years of Indonesian occupation, and Habibie’s circle of young Islamists was inclined to let them go.

Howard’s letter was designed to keep Timor-Leste in the Indonesian fold, proposing a couple of decades of autonomy followed by an act of self-determination. It had the opposite effect. Habibie promptly announced the Timorese would have an immediate vote on their future. 

However, by the end of 1999 Howard was basking in the role of liberator of Timor, and he was impressed enough to send Thawley to the prime diplomatic post of ambassador to the US. By all accounts, Thawley was a superb operator in Washington, helped by the closeness that developed between Howard and George W. Bush after the September 11, 2011, al-Qaeda attacks.

Although never a public figure or glad-hander − and like his ONA mentor and predecessor in Washington, Michael Cook, wary of the media to the point of contempt − Thawley is described by insiders as congenial, unpretentious and direct. These are the qualities that made him a range of key contacts in the Bush administration and congress. 

Heilbrunn, author of They Knew They Were Right: The Rise of the Neocons, found him open to argument “even though my book pretty much contradicted everything that he believed about the Iraq war”.

Aside from adroitly managing Howard’s alliance diplomacy during the Afghanistan and Iraq conflicts − in which loud professions of commitment masked minimal deployments − Thawley’s five years in Washington were marked by three notable achievements.

The first was the signing of the US-Australia Free Trade Agreement in 2004, a contentious arrangement that excluded or deferred opening to some key farm items. A decade later it has been criticised for diverting trade better placed with Asia, but it has many staunch defenders, including Gyngell. “It removed trade as a nagging issue with congress that every government beforehand had to fight over,” he said.

Thawley also negotiated a more open visa arrangement that has since allowed many young Australians further education and work experience in the US. Rather more darkly, it emerged after he stepped down, Thawley used his connections on Capitol Hill in 2004 to head off a congressional inquiry into the AWB (Australian Wheat Board) scandal.

In the background, the Howard-Bush years saw a steady tightening of technical and intelligence links between the American and Australian armed forces, in the name of “interoperability”, as real-time tactical information and operational control were added to the existing flow of strategic intelligence. 

Thawley is unapologetic about any of this. His Robert Menzies oration in 2005, after finishing in Washington, was a blast at “our public thinking class” and our “snide and cynical” media. It was also a defence of the alliance with “the most innovative and dynamic economy in the world”.

“Having watched it all from the Washington end for over five years, I have concluded that the efforts of our thinking public class to force us away from the United States come from a lack of confidence in the ability of their fellow Australians to manage our relationship with the United States,” Thawley said. “It is driven by timidity and condescension, not strength or a hard-headed assessment of our national interest.”  

By then Thawley had left the public service, joining the Capital Group, a large American funds manager with 7000 employees around the globe. His work took him frequently to China, where his anti-communism was masked in a great curiosity about the workings of a Chinese system so markedly different to the Soviet Union, at least in economics.

From his Menzies speech and the impressions of his friends, Thawley would believe in a robust US security presence in Asia, backed by Australia, a re-emergence of Japan and Germany as strategic powers, and for Australia itself a larger population and a nuclear industry.

This experience outside the bureaucracy is one reason Abbott appointed him, replacing Ian Watt who had been installed by Julia Gillard. The new head of treasury, John Fraser, has also had a spell in the private sector, with the international bank UBS.

What motivates Thawley, though? “Nobody can figure out why he took the job,” said one former colleague. Most guess that it comes from a sense of duty to the nation, possibly encouraged by a John Howard anxious to save his protégé Tony Abbott from himself.

The recent investment experience will have broadened Thawley’s background, previously set in foreign policy and national security, sectors that occupy about a third of his department’s 450 or so core staff. But his intellect should galvanise the department into deepening its role as an “ideas factory” across all fields.

“I think potentially what Abbott has done is good,” said Terry Moran, who headed the department during the fraught Kevin Rudd years. “It’s bringing in richer experience outside Canberra and getting a range of questions that might not otherwise be asked.”

Yet is a man who still defends the Iraq war likely to restrain Abbott from further foreign forays? Perhaps not, but only after deep study. Meanwhile, their interaction could provide material for a Yes, Prime Minister series, Canberra style, although that is unlikely to surface. 

“You can never tell from the outside at any particular time whether that part of the job is working or not,” said one Prime Minister’s Department veteran.

This article was first published in the print edition of The Saturday Paper on February 14, 2015 as "Strategic command".

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Hamish McDonald is a Walkley Award-winning foreign correspondent.

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