federal politics
17 Jun 2009
So Long, Farewell, Auf Wiedersehen, Goodbyeee!
Peter Costello's decision to quit politics has prompted more than the usual gestures of hypocrisy from both politicians and the media, writes Ben Eltham
Considering how much the media seemed to enjoy writing about him, the orgy of memorialisation that has greeted Peter Costello’s decision to retire is passing strange.
This was the man who provided a guaranteed story on a thousand slow news days. "Will he or won’t he?" asked members of the fourth estate whenever they had nothing much else to write about. The speculation about Costello’s future became something of a career for some, like News Limited’s Glenn Milne, who spilled countless litres of ink championing the leadership and electoral prospects of the former treasurer and soon-to-be former backbencher.
Now that the Member for Higgins’ plans are finally known, the retrospectively prescient among the press corps are telling us they knew it all along. Paul Kelly, for instance, apparently always knew Costello was going to quit, a view he apparently never communicated to his colleagues at The Australian.
Then there’s the prevalent view that, to quote Mischa Schubert from The Age, Costello was "forced to suffer more than his share of agonies awaiting an ascension that never came". While there can be no doubt that Costello found John Howard’s intransigent refusal to simply hand him the prime ministership difficult, it’s not entirely accurate to say any such "agonies" were inflicted upon him.
Put simply, Costello never had the numbers. No-one can become prime minister in the Australian system without the support of their party room; Costello never came close. This may indeed have been agonising. But counting the numbers is also the most basic rule of electoral politics. Costello’s failure to mount a challenge demonstrates nothing more than the brutal reality of party politics.
This reality also puts paid to Tony Abbott’s theory that Costello was some kind of selfless giant of the Liberal Party because "he was not prepared to wreck the Coalition government to lead it." In fact, Costello was never in a position to lead it in government, which is almost certainly why he never tried. Of course, he could have led the Liberal Party without challenge after the 2007 election; no party wrecking would have been necessary. But, either out of spite for his former leader or a disinclination to shoulder the thankless hard work required to lead a party in opposition, he abandoned his claim.
The unseemly display of faux regret in federal Parliament showed an equal hypocrisy. For a start, Costello was hardly correct in saying that "both sides of the dispatch box" would be happy to see him go; Labor will surely miss Costello’s destabilising presence on the Coalition backbench and the implicit leadership tension he so expertly encouraged, even when doing nothing more than spruiking his fairly dull memoirs.
And what about the speculation that Kevin Rudd might find a cushy diplomatic or trade post for the former treasurer? This was even less believable, despite Costello himself expertly stoking the media spin.
"Obviously I have to earn an income," he said yesterday, "but if in addition to that I can do things on the international stage that would help our country, I would be very interested."
Hang on a minute. Costello doesn’t "obviously" have to earn an income at all. As a long-serving former treasurer and member of federal Parliament who was elected under the old parliamentary superannuation scheme, Costello is set for life. Thanks to the Australian taxpayer, he will earn a healthy cut of his former salary until the end of his days, not to mention various generous travel, health care and other perks. Whatever’s motivating his desire to strut the world stage, it’s not financial hardship.
Then there were the teary moments in Costello’s farewell speech in Parliament. "Family is everything to me", he intoned in choked tones of high emotion. For anyone familiar with the profoundly anti-family work practices of federal politics, this would have been more than a little surprising. Running and attaining political office is a relentless grind of 16-hour days that leaves little time for family; being treasurer for 12 years must have absented Costello from his family for long periods. It’s a hard and indeed tragic fact that male politicians who talk about the importance of family often speak from a position of little knowledge of their own. Tony Abbott admitted as much yesterday.
Finally, a word must be said about Costello’s economic legacy. Senior Liberals are fond of calling Costello Australia’s "greatest" treasurer. There is no doubt that we owe the GST in good measure to his many months of hard work in the lead-up to the tax’s introduction. As a growth tax on consumption, the GST was a fundamental tax reform that has helped sustain the solvency of the entire Australian federation. How much worse would the budget positions of the states be right now without the Commonwealth revenue they derive from the GST?
But Costello’s long years of surpluses and tax cuts were also highly complacent in a structural sense. He used the windfall gains of the mining and terms-of-trade boom of the 2000s to fund tax cuts, leaving infrastructure investment and essential human services like health and education to wither on the vine. When the economy turned, so did the federal budget, and those surpluses melted away. As Treasury research eventually showed, Costello in fact ran structural deficits for the last few years of his reign.
Costello’s business and income tax reforms also left an inequitable legacy. Under his watch, capital was taxed far more lightly than labour, and the rich gained disproportionate benefits in comparison with the poor. To take just one example, his decision to give a 50 per cent discount on capital gains tax of investments is an illuminating contrast to the punitive marginal tax rates faced by low-income earners trying to combine government benefits with part-time jobs.
Ultimately, it is difficult to separate Costello’s legacy from that of John Howard. Costello shared his leader’s hard-line pursuit of industrial relations deregulation, the ultimate result of which was WorkChoices and electoral defeat for his party in 2007. The conservative side of politics would do well to remember this particular aspect of the Howard-Costello legacy when eulogising his contribution. But it is unlikely they will.
Meanwhile, as Peter van Onselen rightly pointed out this morning, for the Liberals it is now "Turnbull or bust".
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Excuse my ignorance but what is a ‘structural deficit’ compared to a normal black hole?
Me. I say good bloody riddance!
May I never see his name or face in front of me again.
May Rudd suffer the ‘death of a thousand cuts’ if he gives that thug a cushy sinecure somewhere. Or any job!
He actually left Australia in a bloody mess, with our infrastructure about 20 years out of date, and lots of rich men and women a damned site richer from the money that should have gone on the infrastructure, during the ‘boom’ years. Dazza.
GraemeF,
a structural deficit basically means “in deficit over the business cycle.” In other words, in deficit after taking into account cyclical factors such as terms of trade balances, unemployment rates and productivity growth.
A normal “black hole” is a cash deficit, that is the nominal deficit announced by the Treasurer on budget night.
In a boom, cyclical factors like strong corporate profits, high levels of consumption and commodity prices and low unemployment will tend to push tax revenues up. These factors all reverse in a recession.
You can find the full description of this issue in the Budget Papers - see Chart 10 on this page:
http://www.budget.gov.au/2009-10/content/bp1/html/bp1_bst4-06.htm
“we’re all gonna follow peter costello to the compost fields, to the compost fields…”
http://gardenofselfdefence.blogspot.com/
Thanks Ben.
It seems a variation on ‘seasonally adjusted’ figures.
I am so sick of people heaping praise on Costello as the world greatest treasurer because he ran budget surpluses. The truth is he overtaxed us! And what he took from us wage-earners he gave to the rich and called it a tax concession.
Costellos’ silly debt truck in 1996 was about foreign debt which stood at $192 billion, it became $650 billion in the next few years.
Debt to disposable income in 1996 was 69% of GDP, it was 160% by the time the liberals left and has only fallen slightly to 155% since.
We are and have been swimming in debt for a decade and Costello didn’t notice.
He is a clown, a buffoon and a thug without morals.
Lock up kids he is asked - that is great he says.
Bomb Iraqis to bits - fantastic he cries.
Punish the poor and sick - you beauty he screamed with joy.
Give me a break.
Now to get rid of the idiot Ruddock, Bishop x 2, Tuckey, and all the old dinosaurs.
Costello, for those who don’t know started off in the Labor Party…. (but first response to Ben’s article…)
“Obviously I have to earn an income,” he said yesterday, “but if in addition to that I can do things on the international stage that would help our country, I would be very interested.”
He’s saying this not because of the truth, as you so rightly divined but because he is (like many of those liberal has-been’s and relics) a stickler for the Protestant Work Ethic.
Praxis of which can be sited in the following example, which is true and repeated all over this Sorry nation:
A father who has worked hard all his life has all the material wealth to disguise the fact that his daughter was sexually abused as a child out of his sheer neglect and concern for his own prestige and riches…..
Part II
From what I’ve heard Costello was once an avid Labor Party member and was seduced by a siren scandal of which followed by consequent blackmail, had him under the mercy of the liberals who had damning evidence and no problems poaching him. This I believe is what Bob Ellis wrote about and was consequently sued by Costello who for too long now has been living the life of a double-agent?
http://en.wikipedia.org/wiki/Peter_Costello
Perhaps he is now repentant and ready to embrace the investigations that may very well spend the end of those corrupt insider-trading liberals, once and for all!
‘A change is as good as a rest’ and that’s all Peter Costello is doing, taking a long deserved break from the daily grind of Federal politics. A few years/terms or so…
Since he’s still relatively quite a young man (mid fifties I believe) he’ll be back - ‘raised from the dead like Lazerus’ to take up the fight for power for the Liberals, his timing dependant on the politics/economics of the moment.
About then, with the wisdom and experience of age, (in his early sixties) he’ll be fully determined to finally take his rightful place at the helm of the Liberals (as they search in vain for years/terms for anyone as remotely talented amongst their ranks) to eventually lead them out of their political wilderness…