'Very fundamental crisis,' as Kathryn Campbell is stood down, Greg Moriarty asks public servants to step up

Prime Minister Anthony Albanese confirmed The Canberra Times' revelation on Thursday, as an "appropriate response", that Ms Campbell has been involuntarily stood down from her $900,000 a year senior role within the Department of Defence last Monday. There had been earlier revelations that she had been parachuted into the "special advisor" position by the government's most senior bureaucrats.

The Human Services secretary between 2011 to 2017 is the first known senior head to roll after adverse findings in the damning robodebt royal commission. Commissioner Catherine Holmes found that Ms Campbell, on the weight of evidence, gave misleading advice to federal cabinet about the unlawful, "crude and cruel" debt recovery scheme.

The Defence boss refused to discuss Ms Campbell's newly aired suspension, but at an event in Canberra he stated that the public service was dealing with a "very fundamental crisis" around robodebt.

"Robodebt is a particular focus of attention, but it's a broader challenge. And there's questions about whether the APS is failing in that regard," Mr Moriarty told an Institute of Public Administration Australia event in Canberra.

"I think 'in the moment' it's easy to rush to judgements, but I think it's very clear. I think that the government expects us to give options and it expects us to give fearless and frank advice."

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As the Prime Minister revealed on Wednesday, all the departmental heads had dinner at the Lodge on Monday night.

Mr Moriarty said important re-balancing needs to be done with the relationship between the government and public service, particularly when it comes to advising and supporting the government.

"That means that the government has all the best advice, including when it's difficult, or impossible, or illegal, or the complexity that these issues throw up," he said.

"Once a decision is made, if it's done appropriately through the proper channels, if it is legal and moral - and moral is a personal judgement - if it's legal and moral, I have an obligation to bust my gut to implement it. That's, that's my personal view."

Mr Moriarty said he is all for breaking silos and rebuilding trust in the bureaucracy. He said everyone, not just the ranks of the SES, needs to step up.

"So we've all got a role to play in that. We can all contribute. How are you going to play your role in improving the future state of the APS?" he asked the room full of junior and mid-level public servants.

"I'm of the view that we need to think more about ourselves as part of one APS.

"As the secretary now, I look out across the whole APS and I say, I wish we were a bit more uniform."

Earlier, Mr Albanese said the move to stand down Ms Campbell was a decision made by the Department of Prime Minister and Cabinet and what he called "appropriate bodies."

"It's not appropriate given the potential legal matters that are involved to go through all of the detail there, but certainly there's been an appropriate response from my department and from the public service to the royal commission findings," he told ABC Melbourne.

Just who is in the sealed section of the report where recommendations for referral to criminal and civil action is not known. Seven public servants were adversely named in the public section of the robodebt report.

"Ms Campbell had been responsible for a department that had established, implemented and maintained an unlawful program. When exposed to information that brought to light the illegality of income averaging, she did nothing of substance. When presented with opportunities to obtain advice on the lawfulness of that practice, she failed to act," Commissioner Holmes wrote.

The Canberra Times does not suggest Ms Campbell is included in the sealed section.

The Greens and independent MPs Sophie Scamps and Kate Chaney have welcomed Ms Campbell's suspension as "a start".

The Greens want action on "all those responsible for this brutal and illegal scheme" and an immediate suspension of all debt collection.

Dr Scamps is now highlighting the "urgent need" for independent and transparent processes for major public service appointments.

"[Campbell's appointment] had all the hallmarks of political expediency over process, lacking any transparency or competitive selection criteria," she said.

Ms Campbell had been working in a $900,000 a year advisory role within the Department of Defence since July 2022.

She had been parachuted into the "special advisor" role by the Prime Minister and Cabinet Department secretary Glyn Davis and former Australian Public Service Commissioner Peter Woolcott in the weeks leading up to her sacking as secretary of the Department of Foreign Affairs and Trade in June 2022.

Documents, released on Tuesday, showed Professor Davis and Mr Woolcott had created the role within the AUKUS submarine taskforce for Ms Campbell.