By Paul Osborne in Canberra

LEADING economist Danielle Wood will become the first woman to head a major federal government advisory body.

The Albanese government had originally named public servant Chris Barrett for the role of Productivity Commission chair.
But Treasurer Jim Chalmers said in a statement on Wednesday that Mr Barrett had now declined the role.

But Mr Barrett declined the position and has instead taken on the top job at his current workplace, the Victorian government’s Department of Treasury and Finance.

He will replace the outgoing secretary David Martine, who has stepped down after almost a decade in the job.

Ms Wood will head the commission for the next five years.

“Ms Wood will be the first woman to lead the Productivity Commission or any of its predecessor agencies that stretch back for more than a century,” Dr Chalmers said in a statement.

The CEO of the respected Grattan Institute has an honours degree in economics from Adelaide University and masters degrees in economics and competition law from Melbourne University.

She was previously principal economist and director of merger investigations at the Australian Competition and Consumer Commission, a senior economist at NERA Economic Consulting, and a senior research economist at the Productivity Commission.

Ms Wood is president of the Economic Society of Australia and co-founder of the Women in Economics Network.

She said she was honoured to be offered the position, but also sad to be leaving the Grattan Institute.

“My time at Grattan has been the most exhilarating, challenging and fun of my career,” she said.

“I’m proud that, under my leadership and that of my predecessor, founding CEO John Daley, Grattan has been able to evolve from an institute into an institution, with a central role in improving public policy in the interests of all Australians.”

A pressing task will be modernising the independent body in line with the Albanese government’s agenda to overhaul of key economic institutions

This started with a major shake-up of the Reserve Bank of Australia, including a dual-board structure for setting monetary policy and running day-to-day operations.

In July, shadow treasurer Angus Taylor raised concerns about the appointment of Mr Barrett to the role.

“The test of Mr Barrett’s performance will be in whether he pursues genuine productivity reform or rubber stamps Labor’s union-led agenda that business is warning will take productivity further backwards,” he said.