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Treasurer rules out leadership challenge; questions continue to be raised about appointment of Robert Gerard.

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Wednesday 7 December 2005

Treasurer rules out leadership challenge; questions continue to be raised about appointment of Robert Gerard


MARK COLVIN: Peter Costello has got another Budget in him after all. 


The Treasurer, without the numbers or the momentum for a spill, and still under fire over his appointment of Robert Gerard to the Reserve Bank board, has accepted the inevitable and ruled out a leadership challenge. 


And unlike Paul Keating before him, Mr Costello won't be retiring to the backbench either.  


Some have already suggested that the Treasurer has damaged his long-term chances, because he lacks the stomach for a fight. 


But his supporters insist that nothing much has changed. 


From Canberra Chief Political Correspondent Catherine McGrath reports. 


CATHERINE MCGRATH: No matter what these two politicians say in public, between John Howard and Peter Costello there is a fraction too much friction.  


And thing are getting worse. 


But it wouldn't be good to admit it. And with The Daily Telegraph carrying the headline "Sham Marriage", Peter Costello did what someone in a difficult relationship might do, he bought some time.  


PETER COSTELLO: I will be a candidate for the leadership if there is a vacancy, but there is no vacancy. 


Frankly, I'm just sick of talking about it. 


CATHERINE MCGRATH: And for the first time he committed to delivering the Federal Budget in 2006. 


PETER COSTELLO: By the way, we are talking and preparing the next Budget as we speak. 


ALAN JONES: Which you will be bringing down? 


PETER COSTELLO: Well that's why I'm preparing it. I'm expecting to bring it down, I'm not preparing it for somebody else. I can assure you of that. 


CATHERINE MCGRATH: Peter Costello with Alan Jones. 


And with the 'sham marriage' tag starting to bite, both were playing it down. 


(sound of laughter) 


JOHN HOWARD: Well I think both of us are very happily married: Peter to Tanya, and me to Jeanette. 


CATHERINE MCGRATH: Indeed… and Peter Costello: 


REPORTER: Does the camera lie, Treasurer? 




CATHERINE MCGRATH: Yes, but did it? 


PETER COSTELLO: If the camera snaps for seven hours and 59 minutes, and you're side by side, that's not the picture they're interested in. You know that. 


CATHERINE MCGRATH: Peter Costello has stepped back, but he's increasingly annoyed with the Prime Minister. As one source told me, antagonism is the key dynamic here and the move today is just a 'cosmetic patch', not a change in strategy. 


Another said the Treasurer has ruled out a challenge before the Budget; that's all. 


The other side is feeling more confident. Some senior supporters of the Prime Minister's believe he shouldn't be thinking about his future until this time next year. 


Those in the middle - the majority of the Liberal Party - feel it isn't time to change. As one senior Liberal told me the Prime Minister has proved his voter appeal and Peter Costello hasn't. Some senior Liberals have tried to counsel Peter Costello to just pull back and wait.  


In Question Time, the Opposition leader was trying to capitalise on the Liberals' troubles. 


KIM BEAZLEY: Does the Treasurer stand by his view that the Prime Minister should stand aside before the next election? 


SPEAKER OF THE HOUSE: The Honourable The Treasurer. 


PETER COSTELLO: Mr Speaker, the question's based on a false premise. 


CATHERINE MCGRATH: And while the Opposition did raise valid questions about why the Tax Office didn't refer the Gerard matter to the Director of Public Prosecutions, Peter Costello said that was up to the Commissioner of Taxation, and the Commissioner isn't commenting. 


Shadow Treasurer Wayne Swan wanted to know if the Tax Office was involved in selective prosecutions. 


WAYNE SWAN: Is the Treasurer aware that the Tax Office audit report found that Robert Gerard wrote a letter to the Tax Office in 1994 that included false or misleading statements as to his tax affairs? Treasurer, is it the case that making false or misleading statements to the Tax Office is a criminal offence punishable by imprisonment for up to 12 months? 


CATHERINE MCGRATH: But Peter Costello was quick.  


PETER COSTELLO: The Honourable Member says that something illegal happened in 1994. So I would have expected the Treasurer in 1994 would have referred it for investigation. 


(sound of laughter) 


But I do think it's a bit hard on poor old Ralph Willis to make that allegation now, Mr Speaker, 'cause Ralph Willis was the treasurer in 1994. Why wasn't Ralph Willis down directing prosecutions at the Tax Office? I'll tell you why Ralph Willis wasn't down directing prosecutions… oh, and the finance minister in 1994 was the leader of the Opposition. 


CATHERINE MCGRATH: But there's another question that hasn't yet been answered. These are allegations raised on the Jon Faine's ABC radio program in Melbourne by Chris Seage, a former senior audit manager with the Tax Office: 


CHRIS SEAGE: What I'm saying is that I'm aware of political interference, right? Of… by federal ministers. 


CATHERINE MCGRATH: The Tax Office will only say that cases are dealt with on their merits. 


Wayne Swan says the Treasurer has to explain why Robert Gerard's case wasn't referred to the DPP. 


WAYNE SWAN: Well certainly there are serious questions which must be answered by Treasurer Costello on this matter, and I think this is yet one more example of the intense pressure that the Treasurer is under, and I think under that intense pressure he has run up the white flag in terms of his future leadership campaign. 




The parliamentary session is nearly over, and tonight, who wouldn't want to be a fly on the wall at The Lodge, where the Prime Minister is hosting his party's Christmas drinks? 


MARK COLVIN: Catherine McGrath.