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Costello falters « Previous | |Next »
December 6, 2005

In commenting on the Gerard affair, which has clipped the Treasurer's wings, John Quiggin makes the following observation:

I don’t share the widespread admiration of Costello as either a politician or Treasurer. I think he has the strengths and weaknesses of a school debater. He’s quick on his feet and can get on top of a brief, but rarely takes the trouble to understand the issues on which he is making debating points.

John is right. Peter Costello comports himself as a barrister with a brief in a courtoom. His performance this parliamentary sitting has been full of passion and bluster, avoided answering key questions, and endlessly repeated simple points. This political theatre looked hollow and unconvincing.

Unlike Paul Keating, Costello hasn't done all that well in terms of his Treasury brief on economic reform, and he has been slack in addressing foreign debt and the current account deficit by reshaping the direction of the Australian economy. Costello is content to ride on the back of the resources boom and for Australia to remain China's quarry. What a future.

The Australian Financial Review notes this failure in relation to economic reform. It says:

Mr Costello has avoided the grand narrative. While he has thrown his weight behind particular reforms---such as the GST, which shouldn't be underestimated, and the more recent pharmaceutical benefits, welfare-to-work and Work Choices reform---he has neither articulated a broad reform agenda nor staked his prestige of his office on one.

Yet this broad reform agenda is needed says the AFR because the productivity benefits from the Hawke/Keating reform have fizzled out; the labour market reforms require the easing of poverty traps arising from the steep tax scales and withdrawal rates on welfare and family benefits; the need for a stage two in national competition reform agenda for schools and hospitals etc etc.

The AFR concludes:

What is strange about Mr Costello's reticience is that it is he who needs to establish leadership creditionals, and from having a wider reform platform to sell in 2007.....What is doubly strange is that he recognized the need for a new wave of reform as far back as 2001 when he asked Treasury to write the intergenerational report on the demographic challenge.That was delivered with the 2002 budget and we are still waiting for the "what next?" chapter.

Costello's record of consistent economic growth benefits from the Hawke/Keating reforms to currency and exchange controls, tarrifs and taxes; and it is at the expense of a worsening current account deficit.

A good opportunity opens up for a Beazley-led ALP to to establish the electorally acceptable economic credentials it needs.

| Posted by Gary Sauer-Thompson at 12:58 PM | | Comments (2)


Are you people saying that Peter's only contributions to reforms of the economy and society over the last period are to beat up low wage earners and those on welfare?


What about his leadership and outstanding contributions to the mission accomplished in Iraq, Australia's relaxed and comfortable refugee detention scheme, reconciliation with our black brothers and sisters, warning us and protecting us from the ill intent of all those nefarious brown peoples, infrastructure development and the great jamboree of consumption we are all benefiting from?

Be fair!

[Hmpph! That will put Alexander back in his box!]

Suburban Bloke,
The post was about Costello's Treasury brief not about the record of the Howard Government. In one sense --economic growth and big spending government --Costello has been a highly successful treasurer.

The argument is that unlike Paul Keating Costello has not articulated a broad program on economic reform.

If you take tax reform, then Costello has done little more than more tinker with the tax thresholds. Sure these have put some hard-earned dollars back in the pockets of taxpayers, but this has barely kept up with the effects of bracket-creep.

Good tax reform would include reducing the overall tax take, radically simplifying the tax system, broadening the base by removing concessions and deductions and abolish the punitive effective marginal tax rates imposed on those who are trying to shift from welfare to work.

I do not see Costello doing that. Do you? It is Malcolm Turnball who is currently pushing for substantive tax reform.