January 15th 2000

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Articles from this issue:

BOOKS: 'Robert Menzies: A Life', by A.W. Martin


Letter from France - Farm subsidies a fact of life in Europe

DRUGS - Towards a drug free society

EDUCATION - Different abilities; different outcomes

FAMILY - Women and civilisation

The age of depopulation

CANBERRA OBSERVED - Peter Costello: when will he run?


ECONOMICS - Seattle conference: what did it all mean?

INDONESIA - Indonesia's dangerous year


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Peter Costello: when will he run?

by News Weekly

News Weekly, January 15, 2000
Treasurer Peter Costello may have done his campaign to become Prime Minister serious harm with his recent push to drive down wages in rural Australia as a means of creating jobs. But it would be a great mistake to think there has been any change in the game plan.

Mr Costello's proposal was a classic Canberra Treasury line, later applauded by the economic commentators still barracking on the sidelines for radical reform in Australia.

But it was politically inept, and a godsend for the Labor Party giving Opposition leader Kim Beazley an issue to run with right through until the next federal election.

Coalition MPs quickly lined up to condemn the Treasurer's cheap-jobs-for-the-bush plan as 'crazy' and 'political suicide'.
Prime Minister John Howard was forced to carpet Mr Costello, who then suffered the humiliation of having to 'clarify' his comments to the press midway through a Cabinet meeting.

Some political commentators dismissed the Costello gaffe as either an accident or a failure to explain his argument properly. However, the most extraordinary part about the whole episode was that it was part of a very deliberate and thought-out strategy to lift the Costello profile over the quiet summer recess.

Mr Costello and his inner circle of backers had a two-pronged strategy in a series of pre-Christmas interviews to selected trusted journalists in Melbourne newspapers.

The first entailed a general broadening of the Costello profile as a modern, progressive leader with a social conscience.
This had already begun during the Republic Referendum when Mr Costello came out boldly for the Yes campaign, but the recent interviews also revealed that he wants to find new ways to tackle the drug problem, and to do much more than is currently being done in social welfare policy and on the industrial relations front.

The second part of the Costello plan was to have sent a Christmas message to Mr Howard about the seriousness of his intentions of mounting a challenge next year.

This has largely gone unnoticed in the mainstream media which jumped solely on Mr Costello's bush jobs proposal.
There have been various hints over recent months that he was edging toward a challenge including his declaration that he only had 'one or two Budgets left in him'.

And there has been a growing restlessness in the Costello camp particularly with the Prime Minister performing so unexpectedly well in his second term.

In essence the Costello camp has been warning Howard: we can do this the easy way or the hard way.
The easy way for Mr Howard would be to either privately or publicly declare his intention to resign soon after the Olympics. The alternative and much harder way would be to face a prolonged and destabilising leadership challenge Ñ the first of which could occur as early as April.

Mr Costello knows he needs a full 12 months to remake himself as Prime Minister before the next election, and he needs to soften up those MPs rusted on to the Prime Minister.

Liberal MPs have noticed much more attention from the Treasurer in recent weeks, and the line being put about by the Costello backers is that 'great leaders go out while they are on top''.

Menzies is also being recalled as the only Liberal leader to have chosen his retirement plans well.

The defeat of Jeff Kennett has brought home to Mr Costello the urgency of his quest for the Lodge.

It has shown him how vulnerable even successful leaders can be in the fickle world of modern politics, and has given Costello the strongest argument to convince Mr Howard to leave earlier rather than later.

Costello's push for the Lodge has been aided by a belief that he was being backed by the powerful Murdoch organisation. Certainly Lachlan Murdoch gave a ringing endorsement of Mr Costello during a speech in the United States elast year, and some News Limited papers appear to have taken a particularly hard line against Mr Howard recently.

The reality however, is that the tough line against Mr Howard was more to do with billion dollar Cabinet decisions being made about digital television rather than who was best suited to lead the Liberal Party.

Mr Howard recognised this and took to calling harsh treatment in some Murdoch papers as 'digitorials'.

That issue will be largely forgotten in the next few months.

Now Costello is persona non grata with the National Party, and with many Liberals sitting in marginal rural seats. However, his support base is still surprisingly strong and would mount a respectable first challenge even if a ballot were held tomorrow.
The tension was certainly up when senior Liberals left Canberra for the summer break which could not have come at a better time.

The leadership battle so far has been little more than a phoney war. However, the GST nightmare is still at the back of every Coalition MP's mind, and it will not take much for real hostilities to break out in the first half of 2000.

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