Treasury chief John Stone, who championed smaller government, dies at 96

John Stone, the fearless Treasury chief who once said it was his job ‘to hold the gate against the barbarian hordes’, has been remembered as the most brilliant of public servants and a tireless believer in smaller government.

Former Treasury chief and Nationals senator John Stone has died aged 96.

You can now listen to The Australian's articles. Give us your feedback.

You can now listen to The Australian's articles.

John Stone, the fearless Treasury chief who once said it was his job “to hold the gate against the barbarian hordes”, has been remembered as the most brilliant of public servants and a tireless believer in smaller government.

Mr Stone was secretary to the Treasury from 1979 to 1984 and later a Nationals senator. He died on Thursday aged 96.

On Friday former prime minister John Howard said Australia had enjoyed the professionalism and advice of many talented public servants but “in my opinion, none surpassed John Owen Stone”. “He was possessed of a superb intellect, passionate about the causes in which he believed, and relentless in his pursuit of first-class public policy,” Mr Howard said.

Mr Stone is credited with creating the Fraser government’s “fight inflation first” strategy. At the time, The Australian’s editor at large Paul Kelly described him as one of the two men who ran the nation. The other was Malcolm Fraser.

Mr Howard said he embraced much of the economic advice he received from Mr Stone but the pair “parted company politically” over the 1987 push to install Sir Joh Bjelke-Petersen as prime minister. Mr Stone was elected to the Senate the same year. “He gave that push considerable economic credibility. The former Queensland premier’s very conservative views on social issues were attractive to Stone,” Mr Howard said.

“His sure-footed and logical approach to economics deserted him when it came to politics.”

Mr Howard said Mr Stone was a talented wordsmith with a great sense of humour.

“For years his finely crafted minutes to me as treasurer commented in an acerbic fashion on successive decisions of the Australian Conciliation and Arbitration Commission (now Fair Work Commission) following regular wage cases. He told me that he lived in hope that in future there would be decisions which would temper, rather than fuel, inflation.

“Out of the blue, so to speak, came a wage case decision which both of us warmed to. In his minute on the decision he remarked, ‘it surely must be a case of constant stoning wearing away drips’.”

Mr Howard said Mr Stone supported tax reform but always advised expenditure restraint in preference to tax adjustments.

 “Critics of John Stone and, more generally, the Treasury claimed that the former Treasury Secretary did not really believe in financial reform.” Mr Howard said. “He supported reform but feared that excessive focus on structural reform would divert attention from the ever-challenging size of government.

Mr Howard said Mr Stone was a fierce critic of industry protection and would have been appalled at US President Donald Trump’s approach to tariffs. “He rightly believed that high tariffs hurt consumers,” Mr Howard said.

Mr Stone was born in Perth in 1929, the same year as Bob Hawke, and they were contemporaries at Perth Modern School and the University of Western Australia. They were selected as WA’s Rhodes Scholars two years apart. Three decades later, when Hawke became prime minister, he reportedly urged Paul Keating to sack Mr Stone as Treasury chief. According to the Australian parliament’s biography of Mr Stone, Mr Keating was mindful of Mr Stone’s international reputation for fiscal responsibility and the need for Labor to distance itself from the economic policies of the Whitlam years. He ignored Hawke’s advice.

Former prime minister Tony Abbot described Mr Stone as one of Australia’s most courageous public intellectuals.

The founder of the conservative HR Nicholls and the Samuel Griffith societies, he stood for intellectual freedom, individual responsibility and the rule of law.

“John was perhaps our most prominent contrarian: someone who exposed the orthodoxies of the day to withering and fearless scrutiny, saying what he believed needed to be said but that almost no one else would,” Mr Abbott said.

Mr Stone’s indispensable colleague and soulmate was his late wife Nancy.

They were married for almost 70 years. They had five children.