Pm Breaks Another Promise To Costello, But He's Used To It

The Age

Saturday September 15, 2007

Tony Wright, National Affairs Editor

PRIME Minister John Howard promised more than two years ago that his Treasurer, Peter Costello, would be the first person he would consult when he finally approached the question of his retirement.

That promise was broken last week, the latest in a chain of jiltings that have left many observers questioning whether Costello will ever become leader. The Prime Minister first asked Foreign Minister Alexander Downer last week to take "soundings" about his support among senior cabinet ministers. Then, having learned that the ministers thought he should hand over the leadership, he spoke to his family on Sunday.

Although Costello is second only to the Prime Minister in cabinet seniority, he was excluded from Downer's meeting with ministers, and the Treasurer still did not know what was happening when Howard sat down with his wife and children and decided he would fight any attempt to remove him.

Yet almost 21/2 years ago, Howard explicitly stated that Costello would be the first to know of any such decision.

Interviewed on ABC-TV's 7.30 Report on May 5, 2005, Howard was asked by Kerry O'Brien: "So whether you decide to stay or go, you'll have that conversation with him (Costello) at an appropriate time?"

"He will be the first person to consult," Howard said. "But in the end, I am at the Liberal Party's disposal. I mean, I am their servant." It was in the midst of one of the string of leadership rows that have punctuated the relationship between the Prime Minister and the Treasurer, and which have always ended with Costello being left on the shelf.

Howard made his promise to consult Costello in May 2005, after sparking a dispute over the leadership transition when he told two journalists in Athens that he believed he could beat then Labor leader Kim Beazley at the election. He told the journalists he was still fit and in good health, retained enthusiasm for the job, and still had a big agenda.

He denied at the time that he was implying he would still be leader at the election, but Costello and his supporters were furious. Costello had made the assumption that Howard would hand over the leadership after the 2004 election, but he took Howard's comments in Athens to mean that the Prime Minister had no intention of shifting.

Costello had made the assumption that Howard's leadership had a short use-by date in 2003, when Howard turned 64 and reneged on his previous position that he would consider retiring on his birthday. The Prime Minister at the time had adopted the formula that he would "stay as long as the party wanted him to" - a formula that he maintained for four years, until this week.

When Howard returned to Australia from Athens, Costello confronted him and declared later that he had told him that senior Liberals expected an orderly transition in the leadership.

Costello's disappointments go back to the early years of the Howard Administration.

Former Defence Minister Ian McLachlan revealed last year that he had witnessed a meeting between Howard and Costello in 1994 - two years before the Howard Government was elected and at a time when Howard was agitating for a smooth transition of the leadership from Alexander Downer to him. McLachlan said he had made a note saying that Howard gave Costello an undertaking that he would serve only two terms if the Coalition won office. He had carried the note around in his wallet ever since. His recollection was that Howard had said something like: "I can't guarantee this to you, Peter, but my intention is not to hang around forever ... if I win, I'll serve two terms and hand over to you."

Howard claimed after the note's existence became known that he had never given such an undertaking.

"There were lots of discussions at that time, including one in which Mr McLachlan was present," he said. "That did not involve a conclusion of a deal."

Costello kept a steely silence over the matter, but it was important for Howard to deny any secret deal, because - just as he did this week - he has always taken some pleasure in taunting the Labor Party about the secret "Kirribilli Agreement" between Prime Minister Bob Hawke and his Treasurer, Paul Keating, in 1989. "It will ever be the shame of the Australian Labor Party that they were part of that miserable deception and that miserable conspiracy," he thundered on Thursday.

At the end of this week, Howard, having broken his promise to consult Costello first about whether he would stay or go, was having it both ways - again.

This time, he has pledged both to stay and to go - in about three years. And Costello? He remains the man on a promise, which seems about as solid as it was in 1994, 2003 and 2004.

UPS ? AND DOWNS

JANUARY 30, 1995: John Howard is elected Leader of the Opposition and Peter Costello becomes deputy leader of the Liberal Party in a bloodless transition.

MARCH 11, 1996: Howard, Costello and ministry sworn in at Government House, Yarralumla.

WEDNESDAY, JUNE 3, 2003: Costello is furious when he learns the Prime Minister is not going to stand down on his 64th birthday (July 26, 2003), as he had suggested three years previously. Bitterly disappointed, Costello tells a press conference, "I will continue to commit myself to being deputy leader of the Liberal Party."

But he says he will broaden the range of issues on which he will comment.

TUESDAY, SEPTEMBER 11: After Alexander Downer informs Howard that senior ministers believe he should step aside as Prime Minister, Howard makes it clear he will not quit, declaring he has never walked away from a fight. He and Costello ignore each other in Parliament.

WEDNESDAY, SEPTEMBER 12: Howard announces he will retire well into his next term and that he expected Costello would succeed him.

© 2007 The Age

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