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April 2006
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Daily Media Quotation

Iraq Inquiry Offers A Dream Run To Costello

April 16, 2006

by Glenn Milne - Sunday Mail (Brisbane)

It's been an important week for the internal leadership dynamics of the Federal Liberal Party.

To recap: John Howard goes into the witness stand at a royal commission, the first prime minister to do so in 23 years. He's preceded into the dock by Deputy Prime Minister Mark Vaile and Foreign Minister Alexander Downer.

Meanwhile, back at the Canberra ranch, Treasurer Peter Costello brings down the most comprehensive report card on the taxation system seen in recent years.

Inside the Liberal Party, both events were major tests for Howard, Downer and Costello. Their performances and responses were and will be watched closely.

There is no doubt that the appearance before the Cole Royal Commission has damaged both Howard and Downer.

Downer looked at best negligent and at worst wilfully ignorant in his testimony.

Howard, protected by the power of his office on the one hand and the narrow terms of reference which he set for Cole on the other, gave a better performance. But not by much.

The shared defence of both men when it came to their knowledge of AWB kickbacks to Saddam was of the "I was out of the room at the time" variety.

The simple fact of their appearances diminished them, let alone their limp excuses for not knowing about what half the Australian bureaucracy knew. Cole's conclusions will determine how much damage Howard and in particular Downer, who had direct ministerial responsibility for AWB, will sustain.

And this is important. When it comes to the Liberal leadership, Downer is a Howard favourite.

This is strategic, as much as personal. While Howard likes Downer and they are both from the socially conservative wing of the party, the Prime Minister knows that as long as Downer continues to perform well, he acts as a foil against Costello's ambitions.

At the very least, Downer wants to be Liberal deputy leader and Treasurer in the event of Howard's retirement. Up to now he has deserved to hold those ambitions.

But Cole has now put a very large cloud over the Foreign Minister's capacity for the very highest of offices.

That capacity is set to be tested across the Government by a Labor Party rejuvenated by its successful campaign to get Howard et al dragged before the bench.

The ALP plans to make competence its watchword in attacking the Coalition.

Unlike Downer, Costello has escaped the Cole odour. And you could be excused for thinking the Treasurer might have just got a moment's pleasure in seeing his current rival the Prime Minister, and his potential future opponent the Foreign Minister, in front of the beak.

But Costello has made another rod for his own back with the 400-page report into the tax system he brought down this week.

Or has he? The inquiry, conducted by leading business figures Dick Warburton and Peter Hendy, measured Australia's tax burden against comparable OECD countries.

It ended up as a bit of a curate's egg good in parts, bad in parts. In some areas we lead the world and in others we lag. Which allowed interest groups and observers to take from the report what they wanted. In the end the commentary sounded a bit like a soundbite from the Tower of Babel.

Which has suited the Treasurer. The very fact of the report itself has allowed him to reclaim the tax debate which he had lost to the likes of Malcolm Turnbull. But now he will have to deliver a credible mix of tax cuts and tax reform in the Budget next month.

If Costello pulls it off he will have enhanced himself against both Downer and Howard.

To what degree will be a matter for Commissioner Terence Cole.



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