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Autumn 2001 cover

National Observer Home > No. 48 - Autumn 2001 > Editorial Comment

Mr. Peter Costello: Australia's Worst Post-War Treasurer

Immediately before the introduction of the Goods and Services Tax, on 1 July 2000, an intense campaign was waged in newspapers and on television. This campaign comprised misleading advertisements that are a matter of shame for the government of Mr. John Howard. In particular, there was a concentration in the advertisements upon liberation through the breaking of chains. In advertisement after advertisement various taxpayers were shown breaking their chains; this was intended to show the previous tax system as the "chains" and the new alleged "reforms"1 as a kind of freedom. It has been estimated that the cost of these advertisements was $40 million. What is the truth that these advertisements concealed?

The truth is that the government-paid advertisements were misleading and that the changes to the tax system promoted by the Treasurer, Mr. Peter Costello, have been much more burdensome than what was there before. Indeed, an enormous administrative load has been cast upon small business in particular. It has been necessary for millions of taxpayers to make sophisticated tax calculations, at their own expense, and to send to the Australian Taxation Office forms setting out the results of these complications. In some cases businesses have had to close down. In other cases there has been a loss of valuable time and a reduction of profitability. And the financial burden on consumers of the Goods and Services Tax itself has been much greater than the electorate was led to believe.

This advertising campaign was entirely deceptive. But also, it was a government-funded campaign. There are particular dangers in the abuse of government propaganda. It is a tool of totalitarian régimes; it discloses a lack of integrity; and it carries great dangers in democratic societies.

Similarly misleading was Mr. Costello's press release of 11 October 2000 on proposals for a new system for taxing family trusts. His press release was headed, "Taxing Trusts Like Companies". In fact the proposals would have done no such thing. What was proposed was a harsh and complicated new system which would have made family trusts (which are especially useful for the protection of assets and the distribution of property) unusable for many small businessmen and farmers. The proposals emanated, of course, from the left-of-centre tax policy advisers in the Australian Taxation Office and the Treasury Department who have been responsible for so many recent changes which Mr. Costello has misdescribed as "reforms". And in a subsequent press release of 28 February 2001 Mr. Costello was eventually forced to withdraw the proposals, which he now stated to be "not workable".

Here the question of Mr. Costello's early involvement with the Australian Labor Party has particular significance:2

"His biographer, Ms. Tracey Aubin, has written: 'The record shows that in the late 1970s, his links to the A.L.P. and significant figures in it were close and substantial . . . Labor was beginning to count Costello as one of its own as early as 1976.' She states, 'Costello's involvement with Young Labor at this time was an active one. In 1976 and 1977 he was an energetic member of a team campaigning to take control of the Shop Assistants' Union from the National Civic Council and reaffiliate it to the National Labor Party.' She states that he took part in Young Labor Conferences, where he was seen voting, and that in May 1978 he attended an intensive Labor 'school' or training camp, which Mr. David Cragg has described as being 'for full-on member activists'. At a similar school in 1979, Ms. Aubin states, his name appeared just above that of Mr. Paul Keating. It will be recalled also that Mr. Costello's brother, the Reverend Tim Costello, is generally perceived to have a leftish rather than conservative position, and has actively criticised many policies of the Coalition government. Is this merely a coincidence, or does it have some other significance?"

In the competition to be Australia's worst post-war treasurer Mr. Costello's main rival may be seen as Dr. Jim Cairns, who held office in Mr. Gough Whitlam's government. Dr. Cairns' bizarre views and his contribution to the destabilisation of the Australian economy, with unsupportable growth of the public sector, high inflation and the erosion of independence from government and of work-ethics, are now well-documented. Mr. Costello's legacy will be not only the deformation of Australia's taxation system but a legacy of distrust amongst both conservative and independent voters who will, unless a remarkable change takes place, vote out the Coalition government at the next Federal election, largely as a result of Mr. Costello's policies and personality.

National Observer No. 48 - Autumn 2001