The need to rebuild policy capability is urgent because Australia is at an inflection point in history similar to that after World War II or the early 1980s, according to the outgoing secretary of the Foreign Affairs Department. 
Peter Varghese is due to leave his post as secretary of the Department of Foreign Affairs and Trade on   July 1.
In parting reflections delivered to the Institute of Public Administration in Canberra, Mr Varghese reflected on Australians' historic relationship with institutions, and the relationship between politics and the public service.
He laments a loss of capacity in recent years for "deep policy analysis" in both politics and the public service and says it is "urgent because we are at an inflection point in our history".
"It is not dissimilar to the period after World War II when the nation had to set out in a new direction and when the political and public service leaderships worked so well together to chart that direction," he said.
"Or the period from the early '80s when we set out to internationalise the Australian economy; or the '90s when tax and industrial relations policies had to be redefined.
"Today we may be at such a point", said Mr Varghese, a career public servant who was also previously head of the Office of National Assessments.
"We face an anaemic global economy. Enhancing productivity is proving difficult. We need to reposition Australia to take advantage of the services demand of the rising Asian middle class.
"We face an Indo-Pacific strategic environment which is being rearranged as economic weight is redistributed. And the Asian growth story is itself perched at a transition point, dependent on politically hard structural reforms in the larger Asian economies to keep it going."
Mr Varghese was optimism that rebuilding of analytical capacity could occur in the public service.