Costello clears the way for Turnbull

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Costello clears the way for Turnbull

By Michelle Grattan

Malcolm Turnbull has been given a clear run as Liberal leader to the next election, with Peter Costello's announcement he will not stand again for his seat of Higgins.

Mr Costello yesterday ended intense speculation about his future - and his hopes of ever leading the Liberal party - with a statement saying "it is time for me to pursue other interests".

Peter Costello with Prime Minister Kevin Rudd. The former treasurer yesterday announced his departure from politics.

Peter Costello with Prime Minister Kevin Rudd. The former treasurer yesterday announced his departure from politics.Credit: Andrew Meares

The decision, which surprised many of Mr Costello's colleagues, removes any threat to Mr Turnbull's position between now and the election, due late next year.

Liberal frontbencher Tony Abbott said Mr Costello's decision meant "Malcolm Turnbull can now consolidate his leadership and provide his policies without in any way having to look over his shoulder".

While in that sense the Opposition would be better off, Mr Abbott added that "it is Australia's loss that we won't have a man of such extraordinary capacity in our Parliament and in our public life".

The announcement prompted a rare outpouring of praise for Mr Costello from rivals on both sides of politics - a point wryly noted by Mr Costello as he spoke later in response.

Informing Parliament of Mr Costello's decision, Mr Turnbull declared that the former treasurer had taken the country through "a period of unparalleled prosperity and unparalleled economic growth". It would never have happened without Mr Costello's contribution, he said.

Prime Minister Kevin Rudd also praised Mr Costello, particularly for his role in handling the Asian financial crisis and in the establishment of the G20 finance ministers meetings.

Speaking after Mr Turnbull and Mr Rudd, Mr Costello told Parliament he had not thought he would ever see the day when both sides "would say nice things about me. It is just possible that both sides of the dispatch box are happy with the announcement I have made."

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Mr Costello paid tribute to the previous Labor government for its economic reforms. "Every now and then it is worth paying credit to the people who put in place important reforms before your time," he said.

"I have always paid credit, because I think they were right, to Hawke and Keating for the liberalisation of the financial markets and the cutting of tariffs."

Also putting aside rivalries was Treasurer Wayne Swan, who released a statement saying he and Mr Costello "have been sparring partners for five years now and, surprisingly, I think I'm going to miss him". Mr Swan praised Mr Costello's "lengthy and memorable career in the service of Australia".

But former prime minister John Howard, whose final years in office were marked by persisting leadership tension with Mr Costello, was restrained. "He was treasurer in a government which left Australia better able to weather the financial storms of recent times than virtually any other nation in the world," Mr Howard said. "That is something of which he and all other members of that government should be immensely proud."

Mr Costello, 51, entered Parliament in 1990 and went on to become Australia's longest serving treasurer, bringing down 12 budgets between 1996 and 2007.

While the leadership tension between Mr Howard and his deputy became increasingly destructive in the later years of the Coalition government, Mr Costello never challenged for the leadership.

After the 2007 election defeat Mr Costello shocked the party by saying he would not take the leadership and would seek a commercial career, but later he appeared to re-engage.

Announcing his decision to leave Parliament at the next election, Mr Costello said yesterday: "It is in the long-term interest of the Liberal party for others of ability and integrity to step forward and represent it."

He said Australia's best years "can still be in front of it. This is still a young country with wonderful opportunity and, properly governed, there are greater things in store for us," he said.

Mr Costello has given no indication of what he will do after politics. He said he would continue to be involved in public policy, particularly at the international level, through his work on the international advisory board of the World Bank.

Preselection for Higgins, which takes in affluent eastern suburbs of Melbourne, will be hotly contested. Candidates earlier interested included the former director of the Victorian party Julian Sheezel, who was supported by Mr Costello, and Jason Aldworth, from Melbourne-based consulting company CPR, who is close to Liberal power broker Michael Kroger. The director of the Public Affairs Institute, John Roskam, said this week he would stand if Mr Costello went.

Other names to have been mentioned include Andrew Abercrombie, a wealthy businessman; Tom Elliott, son of former Liberal Party treasurer John Elliott, and Kelly O'Dwyer, a former Costello staffer now in banking.

Last night the Victorian Liberal administrative committee extended the nominations deadline by a month, to the end of July. The candidate will be chosen by a plebiscite of all local Liberals; there are more than 1000 local members in the electorate. Higgins is on a 7 per cent margin and would be safe in an election.

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Among the tributes for Mr Costello was a statement from the Business Council of Australia, which praised him for his contribution to public policy.

"A number of his decisions played an important role in laying a foundation which assisted in limiting the damage to the Australian economy from the global recession," Business Council president Greg Gailey said.

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