Costello and his legacy

When Howard biographer Peter van Onselen interviewed Peter Costello last year, the Treasurer was doing more than just going over old issues like the 1994 leadership agreement or the 2001 Shane Stone memo leak reported in this morning’s papers. He also had an eye to how his term as Treasurer would be seen, in light of criticisms of the Howard government’s spending record:

Mr Costello, frustrated at being overruled by the free-spending Mr Howard in expenditure review committee meetings before the 2001 election, would throw his hands in the air and exclaim: “What is the point of these meetings?”

This is a theme he returned to at a speech to a Liberal student function a couple of weeks ago, when he wryly noted that very few Ministers ever bring proposals for exepnditure reductions to the Budget process. Ministers get blamed for results their Departments announce, and so the Treasurer has received flak for a lack of spending discipline by the Commonwealth government.

His sensitivity on this point was such that he replied to my Policy article on ‘big government conservatism’, with his article in the current issue of Policy arguing for the government’s record on spending as a proportion of GDP (see also my reply and Robert Carling’s response).

Though I disagree that the government’s spending record is good (though as with economic conditions generally, it is important to acknowledge that it could have been a lot worse), I haven’t been allocating blame to Costello personally. I avoided even mentioning him in my big government conservatism piece. It is very unlikely that he dreamt up many if any of the government’s big-spending programmes, and FTB in particular has the Prime Minister’s fingerprints all over it. Unfortunately for the Treasurer, though, he is the one who has to go out and impose taxes, and he is the one who may well be seen, at least in the right-of-centre version of history, as the man who did not, or could not, take advantage of very favourable economic conditions to reduce taxes futher.