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the authors of the book behind

the headlines , the Costello

memoirs. Former Treasurer and

now the most talked about back

bencher in Parliament, Peter Costello, accompanied by his

co-author and father-in-law,

journalist and former leader of

the Liberal Party in NSW

Parliament Peter Coleman. Peter

Costello and Peter Coleman with

today's National Press Club address. Ladies and gentlemen,

welcome to the National Press

Club. From the introduction

you've just heard from the ABC

you do get the impression that

there are two authors but let's

just widen it a bit. Books are

a product of a team effort and

the publish ser a part of that.

We're going to start off today

with a word from the publisher

Louise Adle rerkz. Please

welcome Louise. Thank you very

much for that introduction and

thank you for inviting us to

launch the 'Costello Memoirs'.

Publishers are creatures of

instinct and habit. There's

nothing scientific about our

business. Market research

doesn't help much, we rarely

pay for advertising and

promotion and most importantly

we commission books and writers

based on our intuition. We're

utterly dependent on your

author, the media, the book

sellers and in the end book

buyers for our success.

Publishing is a lottery, some

books work, others unfairly

disappear without a trace. So

my first thank you today is to

our authors, Mr Costello and

Liz collaborator Mr Coleman,

otherwise known as MUP as PC 1

and PC 2. We signed a

publishing contract for the

Costello Memoir alternate

beginning of February and the

finished manuscript was

delivered in the first week of

July. That's five months to

write 140,000 words, an

extraordinarily punishing

schedule that required

intensive research, debate and

an extremely successful writing

partnership. But the idea of a

lit Cal memoir by Peter

Costello first dawned on me on

a plane back from Canberra two

weeks out from the election.

Peter Costello was sitting two

rows in front of me and it was

the day of the debate with

Wayne Swan. Now since I live in

the electorate of Higgins I

thought it was appropriate to

introduce myself. As we dis

embarked Peter Costello

suggested that I should thank

him for helping to sell the

Howard biography by . Now as

you'd be aware publishers are

only as good as the

opportunities that they seize.

So as pooe Peter, a very long

limb, strode through the Qantas

airport towards the luggage

carousel I trolted along on my

rather shorter limbs beside him

and politely inquired as to his

interest in writing his memoirs

should the election outcome not

be all that he hoped. He was

categorically noncommittal in a

way that may well be familiar

to many people at this launch.

By By the time we were at the

luggage carousel he agreed

politely that I could call him

after the election. I think he

simply wanted to lose a

persistent publisher. But of

course I called and so began

the courtship rituals that

publishers routinely enl ploy -

lunches, coffee, copy of fine

MUP books and Peter finally

capitulated in February. During

those early conversations it

became obvious that the novice

writer might find writing his

memoirs easier with the support

of an accomplished journal

ition and author. I suggested

the idea of Peter Coleman

wheasmtz first taken a little

aback by the proposition but

came to see the idea of this

collaboration as an

opportunity. That collaboration

across generations, some

political differences and

certainly across States is

itself a unique partnership in

the history of Australian

publishing and I hope in due

course that literary

collaboration will be explored

by for more reflective members

of the estate. Do I hear

silence at the idea of

reflection? I'm sure not. From

the point of view of the

publisher this partnership has

been a tremendous success and

has produce and entertaining,

lively and engaged memoir in a

genre all too often know for

its mie yopia, self-interested

rewritings of history and the

excessive use of the first

person pronoun. So my thank you

to Peter Costello and Peter

Coleman for their commitment

and their focus. They have

worked prodigiously hard to

produce a book that describes

one man's political life and

the larger issues confronting

Australia today. The Costello

memoirs is an argument about

why politics mateders and how

government work. It's an

important contribution to our

understanding of contemporary

political history. A day in

politics might well produce

dramatic changes but books are

an opportunity to take the long

view of history, to recall that

larger story so. As a book

publisher I'd be delighted to

see the luncheon guests here

today buying their multiple

copies because you will need

them for the record. I also in

that context want to thank you

the media today for your

extraordinary support for the Costello Memoir. Your

enthusiasm for this story has

ensured a record first printing

for an Australian political

memoir. As you will be aware,

MEP has long been a publisher

of Australia's political

culture from that early book a

definitive biography of Sir

Robert menzy tlus to the

official biography of Goff

Whitlam to be published in

November of this year and Malcolm Fraser's political

memoirs to be published next

year. So MUP is proud to be

documenting the nation's

political culture and the

Costello Memoirs will take its

place in that library as the

story of one man's life in

politics an his part as

Treasurer shaping Australia

over an 11.5 year period. It's

my pleasure to hand the

microphone to Peter Coleman.

Thank you, thank you, Louise,

thank you, ladies and

gentlemen. I have the

intermaition that you're

impatient to hear Peter

Costello and possibly to ask

him a question or two so I'll

be brief, very brief. The story

of the Costello Memoirs, partly

as Louise has already summed it

up, but it begins, as far as

I'm involved anyhow, early this

year when several of Peter's - Peter Costello's friends,

colleagues and family,

including me but more

particularly Tanya, Peter's

wife and my daughter, were

urging him to record his

account of his momentous years

in public life from say the

dramatic or mellow dramatic

dollar suites case through to

the electoral catastrophe of

December - of 24 November 2007.

We thought of it as an insiders

story but more than that a

contribution, a major one, to

political literature. Now Lee

weez Adler had been thinking

along the same lines but more

actively and she added, of

course, to our discussions her

thought and enthusiasm for the

idea. But Peter, and I think

Louise has also touched on

this, was not so sure. He felt

you'd maybe surprised to hear a

certain mod strk. He'd written many speeches and addresses

over the years but nothing

longer than a few thousand

words, he'd never written a

book and to turn out 130,000,

140,000 words in a few months

was a big ask indeed. And this

is where I came in. Louise Adler thought that I should be

able to help. I'd written a few

books, I'd spent some years in

state and federal politics, I

was an admirer of Peter

Costello, we trusted each

other, so we talked over Louise

Adler's suggestion of

collaboration and decided to

give it a go. We soon settled

the main themes, that was the

easy part, then we wrote,

discussed, debated, edited and

rewrote each chapter as we

worked our way through the

narrative. The co-authorship

worked, which one cannot say of

all co-authorships. You may be

able to pick out a paragraph

here and there and say that was

obviously written by Costello

and that was obviously written

by Coleman, especially if you

have an eye or an ear for that

sort of thing but it won't

always be easy. We had, and

have, some unresolvable

differences of opinion on

certain issues. I am an in the

bone federalist who does not

share Peter's and most federal

members' centralist hostility

to the States. I also - well I

picked that up - I was - before

Mr Turnbull became the member

for Wentworth, he's now my

local member, I was the member

for Wentworth for a few years

and picked up that centralist

idea here. I'm also more

reservations about the Republic

than Peter has. I'm a paid up

member of Les Murray's

Republican branch of

Australians for Constitutional

Monarchy. But these points of

disagreement, these and others,

are small details in the big

picture the book paints, the

age of prosperity and Peter

Costello's role in it. These

are his memoirs, not mine. I've

read with some bemusement a

number of headlines and stories

in newspapers about poison pens

and revenge attacks. Well I'm

here to say that this is

tendentious, wrong headed and

wrong. As a co-author I know

what I wanted to do and I know

what Peter wanted to do. That

is state facts, correct errors

and present Peter's point of

view strongly but fairly and

where possible in a good

humoured way. Any poison or

revengeful ness is in the eye

of the beholder. There were

some occasions, indeed in early

drafts, where I expressed

myself more caustically than

Peter thought reasonable

particularly in comments on the

Government's defeat last

November. He persuaded me to

temper my language and please

note that whatever criticism

the book makes of John Howard's

leadership it insists that he

was one of Australia's two

greatest prime ministers. We

had, as a matter of fact, more

disagreements over pros style

than politics. Politicians and

writers are chalk and cheese. I

used to be a politician but

I've spent 20 years purging

myself. This sometimes led to

tensions but Peter Costello in

prose as in politics is not

predictable. His style and

fluncy changed during the

writing of the book. In if

beginning he would provide

notes, rough but detailed

notes, and I would transmute

them into a chapter or two, but

he quickly developed a writer's

knack. He soon began delivering

chapters that called for

minimum input from the

co-author. Obviously history

will judge Peter Costello as a

parliamentarian rather than as

a prose stylist but in the

process of our co-authorship he

became a writer and a good one.

He will not be as diff denlt as

he once was when he signs up

for the next volume of his

political memoir. I should

adthat I noticed over the

weekend that one critic, a

novelist and clairvoyant,

predicted, or prof sized, that

the Costello Memoirs will not

be read in 300 years. He may be

right. But in the meantime I

recommended to you. Peter and I

are proud of this book. We

await your sentence. Thank you, ladies and gentlemen.

An interesting family, aren't

they? The name most associated

with the event today, he's been

here many times before from

Opposition, from Government,

and most recently of course

during last year's election

campaign. Today in a rather

different, if related role,

please welcome Peter Costello.

Thank you very much, Ken, and

to Louise Adler and Peter

Coleman, it's a great pleasure

for me to be here today and to

share with you something of

this book. The way I remember

Louise Adler approaching me is

quite different. I remember

somebody chasing me off an

aeroplane. I remember striding

out trying to get rid of her, I

remember going down the escalator, I remember standing

at the luggage carousel and she

was still talking and it became

apparent to me that the only

way to get Louise off the scent

was to agree to whatever she

was asking me to do and I

wasn't quite sure what it was.

And I thought I would settle up

with her later on. Well later

on she started applying the

treatment to Peter Coleman and

I realised that the only way to

get out of this situation was

to write the book and I say to

you, Louise, it was well worth

writing the book to get myself

into this situation. Now I did

read on the weekend that one

critic had a go at Louise and

described her as left wing and

the wife of a Labor favourite,

Max Giles. I think the idea was

to damage me by associate with

Louise. I like to hope that

I've damaged Louise by her

association with me. I don't

think there will be a coffee

shop in St Kilda or Cliffton

Hill that she'll be able to go

into now without someone saying

"Weren't you nice to Peter Costello?" And that will be the

end of your career, Louise. Can

I say for Peter Coleman, it has

been really just a wonderful

experience to write this book

with him and I didn't - I'd

never written a book before, I

didn't know whether I could do

it. But with the assistance of

Peter Coleman it really did

prove a very, very fruitful

relationship and for me a

wonderful experience. When he

said earlier that he used to be

a politician, that he spent 20 years purging himself, I

thought he was going to say he

used to be a politician and he

spent 20 years perjurying

himself by writing this book I

hope each of us in one way or

another purged ourselves. Peter

is an intellectual, journalist,

an author and a one-time member

for Wentworth and seeing as

Wentworth is in the news today,

let me just congratulate

Malcolm Turnbull on being elected the Leader of the

Liberal Party. It is a great

honour and a great distinction

for him. This is a trust that

the electors of Australia put

in him and his team to provide

us with strong Opposition and I

hope a change of government.

And while I pay tribute to

Malcolm, I also want to pay

tribute to Brendan Nelson, a

very decent man who served the

party well in very trying

circumstances. He will be

feeling great disappointment

today but he can hold his head

high. I was given the chance to

launch the 'Bulletin''s list of

the 100 most influential

Australian s in Sydney. When

the list came up to me I looked

carefully down it and I went

straight to C to see who was

listed under C. And it wasn't

the name I was actually looking

for, so I went to P because I

thought they might be doing it

with first names and it there

wasn't the name I was looking

for and I thought maybe it's

been done by occupation so I

went to T and I didn't find any

consolation there. I've been

noticing my colleagues who have

been buying this book in record

numbers, they sort of pick it

up like that and then they go

like this. I want to put an

apology to every one of my

colleagues that I didn't

mention in this, there is a

sequel coming and please send

me the paragraphs that you'd

like to write about you. In

fact one of my colleagues who's

here today did actually send a

suggested draft about what I

might say about him and most of

it actually got in. I want to

also say to you, now that I'm

an author, I want to recount

the story of meeting a

Hollywood film director in Los

Angeles one day and one of my

friends said to this Hollywood

film director, Mel, his name

was, Mel, this is the

Australian Treasurer, this is

the guy that balanced the

budget. This is the guy that

paid off debt." And Mel looked

at me and said, "Oh really, I'd

like to make a movie about your

life." So the movie rights are

available if there's anybody

here today who's a talent

scout. When I set out to write

this I wanted to tell the

inside story of our period of

government from 1996 to 2007.

There were three of us that

were in that government for

every day - John Howard, the

leader of the Liberal Party and

prime minister, Alexander

Downer, a previous leader of

the Liberal Party and foreign

minister, and myself as the

deputy leader of the Liberal

Party and the treasure. Because

that government at the senior

level was so stable, between

the three of us we all had

records of one kind or another.

John Howard the second longest

serving prime minister in

Australia's history, Alexander

Downer the longest serving

foreign minister in Australia's

history and myself, as the

longest serving treasurer in

Australian history doing nearly

12 years and being present at

every decision, not just only

in the economic sense, but as a

member of the national security

committee as Australia went to

war in Iraq, in Afghanistan, as

we despatched troops to East

Timor, as we went through the

events of September 11, the

Bali bombings and other matters

of great national security. I

particularly wanted to tell the

economic story of the last 11.5

years. I wanted to record why

we did what we did and the

difference that it's made to

Australia. I start off with the

meeting on 4 March 1996 when

Ted Evans, the softly spoken

Ted Evans came to tell me the

state of the Australian budget

and I'd felt I'd been whacked

between the eyes with a

sledgehammer because we'd been

told that the budget would be

in surplus when in fact the

deficit was 1.5% of GDP, in

today's terms probably about

$16 billion for one year alone.

And I felt that day all of the

dreams and hopes and

aspirations that we'd had in

Opposition for what we would do

once we got into government had

been torn away. That the

starting line that I thought we

were going to begin from had

been ripped back and everything

had changed. And the story is

how we managed to turn that

around and change Australia

from a history of budget

deficits to a history of budget

surpluses. Now all of the

argument in Australia is how

big a budget surplus should be.

When I became treasure the

argument was how big a budget

deficit should be. We weren't

even in this terminology, we

weren't in this land in 1996

and how it gave us the

opportunity to retire. But I

also want to tell something of

the human story because behind

all of these events and they're

con Called to some degree in

the book is a human story of

what was going on and what it

was like to be in government

and one of my favourite

memories of that first budget

in 1996 was when Tanya and I

came to Canberra to deliver it,

my mother was looking after our

9-year-old son Sebastian and

the time came for the budget to

be delivered at 7:30 on a

Tuesday night on national

television and my mother said

to 9-year-old Sebastian, come

and watch, dad's going to give

the budget. And se bestian

said, "Oh no, that's boring".

And she said, "No, come and

watch you might enjoy it." And

he said, "Oh no, it's boring."

And she said, "How do you know

it's boring?". He said, "Well I

read the speech on Dad's desk

yesterday." And I told the

press this story, well the day

before the budget the next

year, the phone rings and

there's this deep voice "Hello,

Peter." "Who's this?" "Laurie

Oakes". "How are you in" "I'm

wondering if I can speak to

Sebastian. I want to ask him if

he's read any speeches on your

desk." And of course here we

are desperately trying to

balance the budget, here we are

trying to get the economy

together but there's a human

story behind it all and the way

that first budget finished I

remember it well, coming back

home on the weekend I said to

our son Sebastian, I said now

I'm going to have a sleep,

Saturday afternoon I'm going to

have a sleep. I said, "If the

phone rings you answer it but

don't wake me up, I don't care

who it is". About two years

later I woke up I said, "Did

anybody ring?. Quted yep.". I

said, "Who was it?". He said,

"It was John Howard". I said,

"What do you tell him?". He

said, "Dad's tired, he's asleep

and he doesn't care who it

is.". This is part of the human

story I try to capture in the

book of what was going on as

these momentous changes were

taking place. I tell the story

in the book about how how we

set monetary policy the

architecture of the Australian

settlement to use the sort of

phrase Paul Kelly would love to

use but it wasn't always the

case and I talk about the

struggle that we had to go

through including the

suggestion that it was illegal

and the prospect of legal

action being taken against us.

But even that too proved

extremely humorous in part. A

couple of days before my son's

CVE exam he came to the table,

he said, "Dad, if the Reserve

Bank wants to raise interest

rates, does it buy or sell

securities?" And I said "Buy".

He said, "The text book says

sell." He said, "Don't tell me the Australian Treasurer

doesn't know whether you buy or

sell bank securities." I said,

"I've got a meeting with the

Reserve Bank governor tor, I'll

ask him." So afternoon I

finished this meeting. We were

sitting at the table, Ian

MacFarlane, I said, "Ian f you

wanted to raise cash rates

would you buy or sell

securities?" Ian said, "Buy."

Rick said, "No, sell."Buy,

sell. Ian said, "Well it

doesn't really matter because

we just announce it and it

happens." I said, "That might

be already for you but my son's

got his exam tomorrow he needs

to know the answer." And all of

these discussions were going on

as the human story that I try

and tell in the book of some of

the big changes that were

happening in our countries. I

tell the story of how we change

the tax system and I don't

think it's well remembered rkts

even today, the heart break

that we had to go through in

relation to that, something

that had defeated government

since the committee of inquiry

set up by the Liberal

Government of Billy McMahon.

But the book also acknowledges

failure s and there were, what

I believe, were failures in our

government. The great strength

will be its economic

performance. I have no doubt

about that. I don't know about

in 300 years time, but I'd

certainly say in 50 or 100

years time they'll still be

looking back on this period as

an age of prosperity without

equal, at least to date in

Australian history. Over this

period where we got more or

less to full employment, where

we balanced the budget, retired

all debt, reformed the tax

system, net household wealth

tripled in value in 11 years

time and I don't think there's

a comparable period, not even

the gold rush period, where net

household wealth tripled and it

truly will be looked upon as an

age of prosperity. But there

were failures and I acknowledge

them. I think the

reconciliation issue haunted

the Coalition all the way

through its period. We got off

to a bad start where at a meet

ing over the report of the

stolen generations John Howard

was heckled, he naturally

raised his voice, as you would,

to be heard. The hecklers also

got more passionate about their

position. It produced ugly and

damaging footage on the nightly

news and I think it polarised

the Government and many of the

Aboriginal leaders from the

outset, something that we were

never able to actually bridge

and fix. I thought the way, and

I tell the story to Bridget,

was to make a big statement of

reconciliation by joining the

walk across the Sydney Harbour

Bridge in 2000. It was

something that didn't come off

and I tell the reasons why. I

think it haunted in Government

because even in the election

campaign itself John Howard was

still putting forward the idea

of an amendment to the

constitution to put a preamble

into the constitution to

acknowledge indigenous rights.

Bear in mind this preamble had

been rejected at the time of

the Republican referendum but

we were still at it trying to

make a statement to try and

bridge that gap as late as the

campaign itself and I think

that was one of our great

failures. I think the other

great failure that we had, and

I talk about in the book, is we

never engaged in succession

planning. Successful

organisations do this. An

organisation that wants to

outlive the tenure of a

particular CEO plans, nurtures,

organises these things,

political parties don't, or at

least our political party

doesn't and I think it was a

weakness. It left us in a

situation where in November of

2007 we were going for a fifth

term with a prime minister who

at that stage could not give a

guarantee to see through the

full term. We were running up

against an Opposition which by

this stage was beginning to

look new, didn't have

substantive policies, but was

promising change and as a

result we went into that

fateful election and lost on 24

November 2007. The Labor's

figured this out. Beattie

stands aside for Bligh, Carr

stands aside for Iemma, Bracks

stands aside for brumby, Lennon

stands aside for the new

Tasmanian premier. The idea is

that you put a new face on the

government, the new Tasmanian

premier who is - you put a new

face on the government, anyway

and you run off to an election

and you seek a mandate to make

up for all the failures of the

previous government. Beattie

was always a genius at this. He

was always seeking a mandate to

creeckt the mistakes of the

Beattie Government and it was a

way of ensuring a transition

and ensuring that the party

goes on. And I talk in the book

about the Labor Party having

the cult of party and the

Liberal Party having the cult

of leadership and I actually

believe we need a much stronger

political party, a much

stronger culture of the

political party in the Liberal

Party if we're going to be able

to manage these things and

preserve us in office. I finish

up the book by talking about

the great honour it is to serve

in public life. It has been,

for me, a wonderful ride. Not

always a happy one. Sometimes

my dear friends in the press

have been a little hard, I

feel, but they're all very dear

friends. Harvey Parbo once said

to me the trouble with

Australia is the people who

know how to run it is either

taxi drivers or hairdressers

and you could adto that

journalists. In fact I was

astounded to see on Saturday

some journalist talking about

these memoirs and how they were

this or how they were that. The

book hadn't even been

released. And yet they were

confidently writing in the

newspapers on the weekend, I

won't name the newspapers, what

was in it and what the approach

was. I don't use any negative

adjectives on my colleagues.

What I do is I tell the facts

and I invite the reader to draw

their own conclusions. Here's

the story, you come and you

draw your own judgments. I

think the thing that I feel

best about over that period of

1996 to 2007 is that our

country, which was not

respected in the region, in the

mid-1990s ended that decade

with a huge amount of respect.

Last year I hosted a dinner for

Le Qwan yz Yu at Parliament

House. He had no direct

opposite number in our

government and he said you

better host the dinner because

you've been around longer than

anyone else so you can be

Australia's minister mentor and

host. As we were finishing the

dinner I said to him do you

recall saying in the 1980s that

Australia would be become the

poor white trash of Asia? And

me said to me "How can I forget

every time I meet an Australian

I'm reminded of it." I said,

"What do you think of our

country now?" And he said,

"You've changed." And we have

changed. In the mid-1990s the

Asian tigers thought they would

take economic growth and

surpass living standards in

Australia and the Asian

financial crisis changed all

that and it was Australia that

in the period of the 1990s to

2007 that got its act together

and became an immeasurably more

strong country. I finish by

saying this - our best days can

still be in front of us. I

believe that. Properly managed

this is a very powerful

economy. A platform of no debt,

balanced budgets, full

employment, low inflation, by

international and historical

standards is a wonderful

platform. Sure there's

instability coming from other

parts of the world but nothing

that this country can't see

through and go beyond. And I

think this country, properly

managed, and that's the big if,

underline it triple time, can

go on from great strength to

great strength and I ask you

all with an open mind, and a

sense of humour, to have a look

at this lively read about my

part in that period. Thank you

very much.

Thank you Peters one and two

and we have our usual

questions. Andrew phrase er

from the Canberra Time. As a

noted student of the many

similarities between politics

and football and given that

some of your closest team-mates

backed a loser very publicly

this morning and given also the

Shadow Treasurer achieved in

nine months what a Treasurer

didn't manage in 11 year years

are you tempted to modify your

game plan over the next year or

two. As I said in the remarks I

made ate a great accolade to be

elected. He now has a wonderful

opportunity to lead the party

and I hope win government.

Winning government's what it's

all about. That's what we

strive for in order to make the

changes which will improve

people's lives. It's a great

accolade to him. If I can be of

any assistance to him I'm very,

very happy to do so. It's a sad

day for Brendan. I know what

it's like. Losing the election

on 24 November 2007 after all

of that work was the greatest

political disappointment of my

life. The great est political

disappointment of my life ,

having worked so hard and I

think got Australia to the best

position it had been in 20 or

30 years, we were thrown out of

government and I asked the

question in the first chapteder

how did it happen? How did it

happen that a government that

had had a record like this was

thrown out of office in

November of 2007 but to come

back to the football analogy,

there's always a season next

year. You rebuild. And you come

back. You know, one of the

problems with politics is they

only give out a premiership

every three years so you've got

to wait three years for your

next crack at the premiership

season but that's what we ought

to be aiming for. We ought to

be aiming to be re-elect ed

again in 2010. Next question is

from Denis Atkins. Denis Atkins

the 'Courier Mail', Mr

Costello. There's been a lot of

discussion lately, and

particularly in Queensland, but

also coming out of the Lyon

by-election and the WA election

results about the future of the

Coalition and the future of the

relationship between the

Liberal Party and the National

Party. I was wondering if you

could offer your advice on

whether you think that the

Liberal Party should stay as an

individual party, should it

a-Mal - a amalgamate with the

Nationals. Our experience in

Victoria has been three

connered contests actually

maximise the Coalition vote.

Gippsland was the most recent

example of that. The National

Party would not have won

Gippsland if the Liberal Party

hasn't run the candidate and

got something like 20% of the

vote. Ably assisted and run by

David Gazard who was down doing

the campaign. Now Queensland's

a little different because you

have optional voting. I

understand that point and I

know that that is a significant

point at the State level. But I

believe at the federal level

you can maximise with a

Coalition approach. Now I get

confused at this point because

as I understand it, we're now

one party in Queensland, we are

only one party in Queensland

and yet somehow they're talking

about splitting this one party

back into its constituent parts

by splitting the Coalition. You're either one party or

you're not and if you are then

I think you can't talk about

somehow breaking it up again.

So having taken that great

step, having now put themselves

into wed lock, I would counsel

against divorce and I'd tell

them don't even play up. Damien

Smith. Mr Costello, the Prime

Minister, Mr Rudd, this morning

congratulated Malcolm Turnbull

on his ascension to the Liberal

leadership by saying he looks

forward to working with him on

a range of issues on a

bipartisan basis. One of those

is transforming Australia into

a Republic, a subject that

you're pretty keen on. Would

you support that or do you

think Mr Rudd has found the

battle ground issue to exploit

divisions between the Liberal

Party for another couple of

years? This will be a very

difficult issue for the Liberal

Party. You now have Malcolm Turnbull, the Leader of the

Liberal Party who was founder

or chairman or whatever of the

Australian Republican Movement.

The membership of the Liberal

Party would still predominantly

be monarchist. This will be a

tough issue for the Liberal

Party. As I write in my book, I

thought the Liberal Party

should of handled this while it

was in government. It will be

much harder in Opposition to

handle this issue. I thought

that a minimalist Republic,

that Liberals could live with,

was the way to go. As a matter

of regret to me that we didn't

get it up in the referendum in

1999. I campaigned very

strongly for it. By the way, my

own electorate voted for it.

Somebody ought to go and have a

look at Mr Rudd's electorate in

that referendum. Did he get a

majority for the Republic in

that referendum? Be an

interesting question. Ask him

the question. If you've got 15

minutes you might hear the

answer too.

Next question is from Sophie

Morris. Sophie Morris from the

'Australian Financial Review'.

Dr Nelson has confirm - that he

spoke to you last night before

calling the spill. What was

your advice to him, was in

retrospect was that the right

tactical move and do you regret

actively campaigning for Dr

Nelson and encouraging your

supporters to do the

same? Well, I'm not an adviser

to Brendan and Brendan makes

his own decisions and did. The

fact that he tells me or others

about what he's decided to do

doesn't mean that I or anybody

else running a strategy, I can

assure you of that. As for

campaigning, I didn't campaign

at all, didn't make a single

phone call. So, you know,

campaigning involves at least

picking up a phone in my

parlance. As it turns out, he

called a ballot and narrowly

lost it just as he narrowly won

it. If I were Brendan this is

the way I'd look at it. He was

told in the papers he was going

to be given a month's stay

before the execution, wouldn't

you rather get the execution

over and done with? I think he

took it on, I think it was the

right thing to do. As it turned

out it wasn't successful for

him but that gives a great

opportunity to Malcolm

Turnbull. The next question's

from Denis Shanahan. Dennis

Shanahan from the 'Australian'.

Your book really does, as you

have said in your address

today, concentrate on the lack of succession in the Liberal

Party and you pointed to

succession plans at State Labor

level. However, the last four

prime ministers have all got to

their position by launching

challenges. Bob Hawke removed

Bill Hayden, Paul Keating

removed Bob Hawke, John Howard

with your assistance removed

Alexander Downer, and Kevin

Rudd removed Kim Beazley. Is

one of the great failures, your

own failure to challenge either

to fail at the first attempt

and try later and do you regret

not challenging and now forever

giving up the chance of being prime minister of

Australia? Well I think, Denis,

if you read the book, in fact I

don't think John Howard got rid

of Alexander Downer at all.

There was no ballot. There was

no ballot. As I say in the

book, the three of us sat down

one night and we decided in the

interests of the party to avoid

a ballot, that the best way of

managing it would be for Downer

to stand down, me not to run

and John Howard to get the

leadership unopposed and that

was absolutely critical for him

because it made him look like a

unifying figure rather than a

dividing figure, which he'd

previously looked like in his

battles with Andrew Peacock. I

think it was sensible and

mature and I think it served

the Liberal Party well and I

think it served John Howard

well. I think it served

Alexander well and to a degree

it served me well. But I think

we should have organised that

again and that's what I write

about in the book when the time

came. We lost the 2007

election. John Howard lost his

seat. Which would be of

enormous disappointment to him

and to me. For a prime minister

to be voted out in his own

seat, I think a transition

would have been better for him,

for the Liberal Party and for

all of us and the fact that it

wasn't done I consider a

failure. We can all bear our responsibilities but I think

there's a big lesson in that

for the Liberal Party. Andrew

Tillet. The West Australian, Mr

Costello. You said in your

promotional interviews for the

book that you want to stay in

Parliament to make a contribution, you've got some

big issues you want to work on

over the coming year, how

exactly can you make a

contribution from the back

bench when someone of your

talent and ability and

experience is going to languish there instead of taking up on

the frontline fight to the

Government? Well, thank you for

the compliments. Nobody ever

rejects nice things that are

said about them and feel free

to republish those words in the

West Australian tomorrow. You

know, after the election on 25

November 2007 I said that I

wouldn't seek nor would I

accept the Liberal Party

leadership. I've been totally

consistent about that. I also

said that I wanted to continue

to serve my constituents, which

is what I'm still doing.

Interestingly enough I probably

do much more for my

constituents now that I don't

have the additional ministerial

jobs than I did in the past.

I've also said if my view on

that changes I'll let you know

but I'm actually enjoying a

period of being able to work

with my constituents. It's not

something I was able to do in

the last 11.5 years. I think

Brendan made the same decision

today. I totally understand why

he did it. There's something to

be said for the American

system. I was thinking about

this today. McCain and Obama

run for president, one will

lose but even if they lose

they'll go back to being a

senator. Nobody will say to the

loser, whether it's McCain or

Obama, why don't you get out of

the Senate? You're no longer on

the frontline, you're not

running for the presidency,

no-one will say that and I'm

sure if it's Obama that loses

they'll say you can go back to

the Senate, go on with that you

might be able to have another

go. I doubt they'll say that to

McCain in four years time. But

in Australia you lose an

election the very day

afterwards you're supposed to

start running for the next election. Sometimes people need

time out. I can understand why

Brendan made the announcement

that he did and that's the

feature of the Westminster

parliamentary system. I

remember Malcolm Fraser said to

me once. He said the trouble

with politics is you should go

and live in a monastery for

three months every several

years and I think if our

politicians had the ability to

spend some time think ing

rather than the incessant

demands of the media cycle, who

know, we might get better

politicians. Next question is

from Meg Palmer. Meg Palm er

from network 10. A lot of leadership speculation was

created and is continuing by

your staying on the back bench.

Do you think you should

therefore shoulder some of the

blame for Dr Nelson's downfall

this morning? No. Peter

Williams. Peter William s from

AAP. You've said you'll give

all this assistance you can to

Malcolm Turnbull. Wouldn't the

best assistance be to resign

from parliament and so remove

yourself as this sort of shadow

in the background that's

threatening his leadership? No.

You can see why I love the

press. Two questions. One, the

events that have happened in

the United States overnight are

you concerned that perhaps

there may not be a job in the

public sector to go to shortly?

Secondly, do you categorically

rule out - In the public

sector, In the private sector,

the public sector depends on

the private sector. And the

second question is do you

categorically rule out standing

as the member for Higgins at

the next election? Well, I'll

tell you about the next

election when the next election

is being discussed. So the

answer's no? Well that's the

answer. The answer is not

whatever you want the answer to

be. That's the answer. You

know, one of the great things

about being a back bencher, you

don't have to play the games of

the media anymore. There's this

sort of view around now that we

ask a question we don't like

the answer, we give our own

answer and if it happens to be

wrong then next week we can say

he changed his opinion because

we gave the wrong answer last

week and look, we gave the

right answer this week. You've

got me every way. You've got me

coming and going. I was elected

in November of last year, I

have served my constituents

faithfully, if I feel that I

can't do that then I will let

you know. But don't start

asking me about 2010. We're

only in - what year are we in?

2008. I've only published

volume one of my memoirs too.

What was your other question

again? The US. Oh, the US. It's

a bad time in the US markets. I

was there last week, I think,

and we were discussing that

with some of the people

involved and John Snow, the

former US treasury secretary.

The first point I'd make is

this it's a failure of the US

regulatory system, right.

People have got to understand

this point. This is a failure

of the US regulatory system,

the subprime mortgage market

was not regulated, money was

lent to people who couldn't pay

it back and then the debts were

offsold. The point I made is

that it's a third example of

instability in the US system

Savings and Loans, the tech

wreck, now we've got the subprime market. The difference

is this, you know, now is US is

a capital importer so if it has

an instability that gets

exported from the United States

all around the world to people

who are buying US debt,

essentially supplying the US

with capital. Far from the US

actually being a force for

stability in world markets,

which it should be with the

most sophisticated financial

markets in the world, it's

become a force for instability

and, you know, I heard Mr Swan

saying today, well the

Australian banks are well

capitalised and well regulated.

He's right about that, it's a

good point to make and, you

know, he might one day just ask

himself who put that regulation

in place over the last 11 years

and he might just ask him who

was presiding over this

capitalisation, why was it that

we didn't get into the same regulatory problems of the

United States, you might ask

himself all of those questions,

but things are done better

here. Now our banks have taken

pressure on their share prices,

there's no doubt about it but

nobody's suggesting there's any

financial institution in

Australia that is insolvent or

has to be loaded off as with

Merrill Lynch or Bear Stearns

or Lehman Brothers or anything

else. Yes, we will be affected

to the degree that our

institutions were buying US

debt or now seeking to raise

money in the US debt markets,

but we're in a much better

position. Let me ask you this

question - where we will be

today if Jeff Lucy here hadn't

run ASIC, great regulator, if

we hadn't set up APRA which was

in charge of setting up

prudential controls in all

deposit taking institution,

where would we be today? We'd

be much more exposed than we

are and again, you know, I Mr

Swan's saying the right thing,

now, saying the right thing,

that Australia's strong and

secure an all the rest of it.

Now, wasn't saying that when he

thought it wasn't in his

political interest a few months

ago, but now he's saying the

right thing and maybe one day

he'll just give a little tiny

thought to how he found himself

in that situation. Brendan

Nicholson. Brendan Nicholson

from 'The Age'. Quite apart

from your acknowledged talents

as the treasure for a long

period of Australia's history,

you have a remarkable skill at

making statements that appear

to be definitive but aren't

quite. Now today we've heard a

number of references to sequel

s an follow ups, the situation

at the moment might be

described by the more cynical

amongst us as one that might

suit your political aspirations

eventually the Malcolm Turnbull

falls over, doesn't succeed and

you might get drafted at some

stage in the future. What will

your sequel to your political

memoirs as has been referred to

here from time to time today a

actually be about? Would you

consider if you're drafted

going on to Malcolm Turnbull's

cabinet as Shadow

Treasurer. Cab net as Shadow

Treasurer. They let Shadow

Treasurers into cabinet do

they. I think my sequel will be

the Australian press. Pen

portraits and character

assessments.

Mr Costello you were the one

who said that you were going to

quit politics an pursue a

career in the private business

world, why have your changes

your mind about doing that? I

think if you read the speech I

made on 25 November 2007 I said

I would not seek nor would I

accept the leadership of the

Liberal Party and I would

continue to serve the people of

Higgins. I have not sought

Noril'sk have I accepted the

leadership of the Liberal Party

and I am continuing to serve

the people of Higgins. I don't

think anything's changed. The

speech is there. Buy the book,

nothing's changed and if I get

to the situation where I feel

that I'm not able to properly

discharge my constituent duties

I'll make that announcement at

the time but nothing's changed.

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