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The Honourable  Peter Costello
35th Treasurer of Australia
In office 11 March 1996 – 3 December 2007
Preceded by	Ralph Willis
Succeeded by	Wayne Swan
Deputy Leader of Liberal Party of Australia
In office 1 May 1994 – 29 November 2007
Preceded by	Peter Reith
Succeeded by	Julie Bishop
Member of the Australian Parliament for Higgins
In office 24 March 1990 – 19 October 2009
Preceded by	Roger Shipton
Succeeded by	Kelly O'Dwyer
Born	14 August 1957 (1957-08-14) (age 52) Melbourne, Victoria, Australia
Nationality	Australian
Political party	Liberal Party of Australia
Spouse(s)	Tanya Costello (née Coleman)
Alma mater	Monash University
Religion	Baptist

Peter Howard Costello (born 14 August 1957) is an Australian lawyer and former politician. Elected to the seat of Higgins in 1990, he was Deputy Leader of the Liberal Party from 1994 to 2007, and served as Treasurer of Australia from 1996 to 2007, making him the longest serving treasurer in Australian history.

On 18 September 2008, Costello was appointed to the World Bank’s new Independent Advisory Board (IAB), which will provide advice on anti-corruption measures.^[1]

Costello resigned from parliament in October 2009, triggering the 2009 Higgins by-election.

Early life

Costello was born in Melbourne into a middle class family of practising Christians.^[2] He was the second of three children: his elder brother, Tim Costello, is a prominent Baptist minister and current CEO of World Vision Australia. Costello was educated at Carey Baptist Grammar School and attended Melbourne's Monash University, where he graduated in arts and law.^[3]

During the 1980s, Costello was a solicitor at the law firm Mallesons Stephen Jaques,^[4] then became a barrister and represented employers in some of Australia's best known industrial relations disputes.^[4]

In 1983 and 1984, Costello represented the National Farmers' Federation in a case against the Australasian Meat Industry Employees Union (AMIEU). The AMIEU was seeking a unit tally system to be set up in abattoirs in the Northern Territory. The dispute focussed on one abattoir Mudginberri which chose to fight the AMIEU claim. Ultimately the AMIEU claim was unsuccessful.

Costello became counsel to organisations representing small business and rose to prominence in the 1985 Dollar Sweets case, as junior counsel assisting Alan Goldberg QC, successfully representing a confectionery company involved in a bitter industrial dispute.^{[5][6 ]}

Political background

Peter Costello (far left) with Melbourne Ports Labor MHR Michael Danby in 1977 as an office bearer of the Social Democratic Students Association of Victoria

During his student years, Costello was active in student politics as a socially radical Christian. For a time, he was an office-bearer of the Social Democratic Students Association of Victoria, an affiliate of the Balaclava Branch of Australian Young Labor. In 1977, Costello was punched by a rival student politician, receiving mainstream media attention for the first time in his career as a result.^{[7 ]}

After graduating, Costello became more conservative but retained liberal views on some social issues. In 1984 he was a founding member of the H. R. Nicholls Society,^[8] a think tank on industrial relations. In the late 1980s, he was identified as part of the New Right movement,^[5] which was organised to some extent in the H. R. Nicholls Society.

Political career

Early political career

In 1990, having defeated the sitting Liberal member Roger Shipton in a preselection ballot for the safe Liberal electorate of Higgins, Costello entered the House of Representatives at the age of 32. He was immediately promoted to the Opposition front bench and proved an effective debater against the Labor government of Bob Hawke and Paul Keating. By 1992 he was shadow Attorney-General, and in 1993 he became shadow Finance Minister under Dr John Hewson. He was a strong supporter of Hewson's policy proposals at the 1993 election, including the Goods and Services Tax (GST).

Hewson's shock defeat at the 1993 election brought Costello into consideration as a leadership contender. When Hewson was deposed as Liberal leader in May 1994, Costello supported Alexander Downer for the leadership, becoming his Deputy Leader and shadow Treasurer. However, in January 1995, Downer resigned. Costello did not seek the leadership, instead supporting John Howard. It was revealed in July 2006 that this was due to a December 1994 meeting between Howard, Costello and Ian McLachlan during which Howard allegedly agreed to stand aside after one and a half terms as Prime Minister in return for Costello's agreement not to challenge for the leadership. Howard denied that this was a formal arrangement.^[9]

As Deputy Leader until 2007 he was the longest serving in that role achieving that status in 2006 after breaking the record from the party's first Deputy Leader Eric Harrison.

Federal Treasurer (1996-2007)

The Liberal/National coalition headed by John Howard won the 1996 election, defeating Labor's Paul Keating, and Costello became Federal Treasurer at age 38. He oversaw the return to and maintenance of federal budget surpluses, which enabled significant reduction in government debt. Inflation, interest rates^[10] and unemployment all fell and remained generally low during Costello's term as Treasurer, although average household debt more than doubled.^[11] Inflation and interest rates crept up toward the end, with the International Monetary Fund describing his last budgets as "inflationary".^[12]

Tax reform became a major policy focus for Costello. Although John Howard had promised during the 1996 election campaign that he would "never, ever" introduce a GST, it returned as Liberal Party policy for the 1998 election. It was passed through the Senate with the help of the Australian Democrats. Until July 2005, Costello's own agenda of labour market deregulation remained blocked by the government's lack of a Senate majority.

In 1998, Costello and his wife Tanya, along with Tony Abbott and his wife Margaret, successfully sued author Bob Ellis for false statements he made about them in his book Goodbye Jerusalem. ^[13]

Costello supported the 1999 referendum on whether Australia should become a republic.^{[14 ]}

After the 2001 election, he attracted criticism for not securing funding for a key election promise to extend the Medicare safety net.

In February 2006, Costello caused controversy during a lecture at the Sydney Institute when questioned about the government's refusal to legally recognise same-sex marriage. He stated, "I think we do recognise the rights of gay and lesbian people in Australia. We do not criminalise [their] conduct or behaviour." He also pointed out that the law was changed in 2004 to recognise same-sex couples with regards to superannuation. He stated that marriage should only be recognised between heterosexual couples.^{[15 ]} Also during the same speech, Costello criticised "mushy misguided multiculturalism," warning immigrants that the acceptance of Australian values was "not optional." ^[16]

Leadership aspirations

Under Howard

Gordon Brown (left) and Peter Costello (right) at the International Monetary Fund 2002 annual meeting

Costello expected to gain the Liberal leadership some time during Howard's second term as Prime Minister, as per Howard's alleged December 1994 offer.^[9] When this did not eventuate, he showed signs of frustration and was visibly disappointed when Howard announced, in July 2003, his intention to lead the government into the 2004 election.

During the 2004 election campaign, Howard avoided saying whether he would serve a full term if re-elected, saying only he would remain as long as his party supported him. The government's subsequent success in winning control of the Senate raised further speculation that Howard would delay his retirement, and the prospect of a Costello leadership succession appeared to recede.

In July 2006, the alleged Costello/Howard succession deal was made public by Ian McLachlan. Costello confirmed the incident had occurred and that he shared McLachlan's interpretation of events.^{[17 ]} Howard denied the claims repeatedly, stating the continued public drama displayed "hubris and arrogance" and that the leadership was the party room's to decide, not a prize to be handed over by leaders to successors.^{[18 ]}

Press Gallery columnist Michelle Grattan described Costello's actions :

Costello doesn't have the numbers to blast John Howard out. But he does have the dirt to make him look bad, and he's throwing it.^{[19 ]}

Despite tensions between the Prime Minister and the Treasurer, nothing further came of those events. Neither Howard nor Costello took any action to remove the other from office, or resign. However, on 12 September 2007, amid renewed leadership tensions and a series of unfavourable public polls, Howard confirmed he would step aside well into the next term, if re-elected, and that Costello would be his "logical successor".^{[20 ]}

A federal election was held on 24 November 2007. An exit poll of 2,787 voters by Auspoll, commissioned by Sky News, included a question on the statement "I don’t want Peter Costello to become Prime Minister". Fifty-nine per cent agreed, while 41 per cent disagreed.^[21][22]The Coalition lost the election.

In opposition

Costello was widely expected to assume the Liberal leadership after the 2007 election, but the day after the election, in a surprise announcement, he said that he would not seek or accept the leadership or deputy leadership of the Liberal Party. This was after John Howard, in his concession speech on the night of the election, specifically endorsed Costello as the next leader for the Coalition. ^[23] A week later, he indicated that he would be unlikely to serve out in full his parliamentary term of three years.^[24]

However, as former opposition leader Brendan Nelson struggled, speculation mounted that Costello would change his mind and seek the leadership. In August 2008, he ruled out challenging Nelson, but did not comment on the prospect of Nelson stepping aside in his favour.^[25]

Finally in September 2008, just before the release of his memoirs, The Costello Memoirs, Costello specifically re-confirmed that he would not be seeking leadership of the party and would leave politics at a time that suited him.^[26] Media attention immediately shifted to whether Costello's decision cleared the way for a leadership challenge by opposition leader Malcolm Turnbull (shadow treasurer at the time). Former fellow Minister Tony Abbott described the decision as a great loss to Australia and to Costello himself, who might continue to have regrets for the rest of his life at what might have been.^[26] Media outlets capitalised on Costello's failure to categorically rule out any future leadership challenge. An incumbent-announced leadership spill on the morning of Costello's book release saw Turnbull defeat Nelson.^[27][28][29] Costello under Turnbull remains unwilling to rule out ever leading the Liberal Party.^[30] Costello remained as an opposition backbencher. On 18 September 2008, Costello was appointed to the World Bank’s new Independent Advisory Board, (IAB), which will provide advice on anti-corruption measures.^[31]

On 15 June 2009, Costello announced that he would retire from Parliament at the next Federal election.^[32][33] However, on 7 October 2009, Costello announced he would be resigning from Parliament when it resumed later in the month, triggering a by-election in his seat of Higgins. He resigned on 19 October, 2009.

Post-political career

Costello has been appointed as a director of the Australian Government Future Fund's Board of Guardian, and will commence this role in December 2009.^[34] He is also a managing partner of BKK Partners, a boutique corporate advisory run by former Goldman Sachs JBWere managers.^[35]

Costello also writes a regular column for Fairfax newspapers.^[36]

References

External links

• Parliament Site
• Petter Costello - Official Website (www.petercostello.com.au)
• Biography - Monash University prominent alumni profile
• Search or browse Hansard for Peter Costello at OpenAustralia.org