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Peter Costello – no guts, no glory

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by Peter Switzer

The exit stage right for Peter Costello is a significant day in both the political and economic history of Australia. Costello was a tragic hero who not enough people liked but his achievements should not be underscored.

The country has been lucky in recent years to have two Federal Treasurers who really put their stamp on changing the place for the better.

Radical reformers

Paul Keating was a much bigger reformer but he had Bob Hawke and a hell of a lot more to do when they took power in 1983. Floating the dollar, deregulating the financial system, micro-economic reform, getting the unions to accept collective bargaining linked to productivity and compulsory super were huge reforms. There were even big changes to the tax system.

On that subject, Costello with the GST and related tax reforms was another earth-shattering reform that he and Howard pushed through. They also steered the budget into surplus, killed government debt and reduced tax rates at the same time.

Critics say that the mining boom made it all easy, but Costello went to the people with a GST at an election and won. That was huge!

Overall, like Swan now, he worked well with the likes of current Treasury head, Ken Henry, and his economic credentials became of an A-grade standard. Anyone who wants to argue that is ‘laboring’ under the stress of viewing him with only one eye.

Little help for small business

The two-eyed view was he got the economics of the country right but he was not a great direct helper to small business - after covering all of his budgets I could never once say he championed the interests of the small business. Indirectly, he created a good economy and that’s what small business owners want most of all. Most of the changes were of minimal impact and the impost of the GST was costly, though by the trial of fire I would concede that many businesses were forced to go online and become better bookkeepers. Indirect ‘help’ again.

Mistakes made

Costello’s one notable mistake was changing the superannuation rules to encourage retirees to sell up their rental properties to tip the money into super just before the crash of the stock market. There’s thousands of retirees who would have preferred to stay in the more stable investment of property.

His early retirement is not only his loss but is one that the country should feel. He could have been a very good Prime Minister and Liberal Party leader but it is obvious that he did not have the stomach for failure. He wanted to be crowned king rather than being prepared to risk it all to take the throne.

The brutal truth

Keating did it and went to the backbench, took on Hawke and prevailed. And by the way, while he had his fans, there were a lot of Aussies who were not Keating fans. His cartoon image was often that of an undertaker!

History will record that Peter Costello did not try hard enough to win. I suspect he is not good at copping criticism. Jim Collins in his book Good to Great, said great leaders have to be keen listeners and be willing to confront the brutal truth, which I think was one Costello’s key weaknesses.

The power and the passion

Don’t get me wrong, I was a fan of Costello but like a footy team you follow, you just know when they haven’t got the desire to win.

Chris Evert, who recently found Greg Norman did not measure up to her standards, once reflected on her success at tennis. This is what she said: “Deep down I wanted to win so badly, I could actually will it to happen. I think most of my career was based on desire.”

Peter Costello wanted the top job but clearly not bad enough to make it happen. Pete’s missed chances can be summed up with something we scream out in the locker rooms of winning footy teams most weekends in winter: “No guts, no glory!”

For advice you can trust contact Switzer Financial Services.

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Published on: Thursday, October 08, 2009