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Monday, 25 February 1985
Page: 110

Senator COOK —Has the Minister representing the Prime Minister for Public Service Matters seen an article in the Australian on 19 December last in which the former Secretary to the Treasury, Mr John Stone, criticises the Government's introduction of reforms in the Australian Public Service? Are there any grounds for Mr Stone's complaints, and specifically for his complaint that he was not consulted on the formulation of the reforms?

Senator WALSH —I have seen the article published in the Australian on 19 December. It is a record of interview with John Wheeldon in which Mr Stone pontificates about the evils of big government and the economic incompetence or irresponsibility of governments. Big government is a matter about which Mr Stone should know something from personal experience because in the period from 1976 to 1982, including when he was Secretary to the Treasury, employment in the Australian Public Service in total increased by 6 per cent, although the increase would have been somewhat greater had some functions not been transferred from the Public Service. In the Department of the Treasury, over which Mr Stone presided, the increase was over 30 per cent.

Senator Ryan —How much?

Senator WALSH —Thirty per cent. The Second Division, which is now called the Senior Executive Service, of the Public Service in general increased by 7.2 per cent in that same period, and increased by 36 per cent in the Department of the Treasury under Mr Stone's stewardship.

One of the other allegations in that article was that the people who actually knew something about the Public Service were not consulted by my predecessor prior to the legislation reforming the Public Service being passed last year. There is absolutely no truth in Mr Stone's allegation. Indeed, Sir Geoffrey Yeend and Sir William Cole were consulted; the whole 1,600 officers of the then Second Division, now the Senior Executive Service, were written to directly by the Minister seeking their views; and Mr Stone , of course, was also asked directly by the Minister. He deigned not to reply.

Mr Stone was given a further opportunity to make his views known and to discuss the proposals at a meeting of all departmental secretaries which was convened specifically for that purpose. Mr Stone did not attend. The reason he gave was that it clashed with a prior luncheon engagement. The meeting was held at 3.30 p.m. I do not wish to suggest that extended lunches of that magnitude are commonplace among departmental secretaries. In fact I would be surprised if they were. Evidently if Mr Stone were giving the real reason for not attending, it was his practice, at least on that occasion, to have a very extended lunch.

Mr Stone was not noted for his modesty when he was in the Public Service. He now appears from time to time all over the country as the self-proclaimed oracle on economic matters. I think it ought to be noted in that context that he presided for approximately five years, as Treasury Secretary, over the Australian economy. The economy in that period was in the worst state, in absolute terms, it had been in since the 1930s and probably was in its worst state ever in relative terms; that is, relative to what was happening in the world. Indeed, it was not until the present Government came to office and virtually ignored the assorted dogmas of J. O. Stone that that record both in absolute and relative terms was turned around.

On the more specific points covered in Senator Cook's question, it was often said, with considerable justification, that as Secretary to the Treasury, Mr Stone, in making his judgment on economic matters, was guided principally by dogma and used to select evidence to support his predetermined conclusions. In his comments on the Public Service he has gone beyond that propensity, which he displayed as Treasury Secretary, carefully to select the evidence which supported predetermined conclusions and has gone completely into the realm of fiction and fantasy.