Outlook Conference 2018: Politicians don’t know what they want says Peter Costello

The Coalition fractured because it no longer has an economic narrative, leaving MPs to band together in a vacuum says Peter Costello.

The Coalition has fractured because it no longer has an economic narrative on which to unite, leaving MPs to band together on social and moral issues in the vacuum, the nation’s former treasurer says.

Speaking at the University of Melbourne and The Australian’s social and economic Outlook Conference in Melbourne today, Peter Costello said governments of all stripes have abandoned their “organising principles.”

“You know, when Malcolm Turnbull challenged Tony Abbott for the leadership of the Liberal Party he had two things to say,” Mr Costello said.

“He said we’ve lost 30 Newspolls in a row and the government had no economic narrative. Now that’s fine, but I kept waiting for the economic narrative to come. And I’m not sure that it did.”

Mr Costello said many reasons have been offered for the breakdown in public debate - such as social media and the 24/7 news cycle, a lack of a senate majority to achieve reform and a loss of bipartisanship - but he disagreed with these.

“A majority senate is the exception, not the rule, and I hate to disabuse you of the notion but there was never a great deal of bipartisanship in Canberra when I was there and trying to introduced the GST,” he said.

“I think the explanation is much more banal than that. The issue is the politicians are just not sure what the change is that they want.”

LIVE: Outlook Conference 2018

Referring to the Howard Government’s own organising principles of small government, delivering surpluses and not deficits, reducing taxes and increasing competition in the market, Mr Costello said these have been abandoned.

“I think the 2007 election shook the confidence of the Coalition. After that the Coalition began to query whether good policy really did lead to electability,” he said.

“As we know Kevin Rudd’s appetite for reform passed and Labor’s appetite for Rudd passed. There was an attempt by the Abbott government in 2014 to resuscitate the idea of balanced budgets but the political disaster not only meant it failed but I think discredited the idea of balancing budgets for quite some time.”

When things got too hard, Mr Costello said, the new trend for leaders is to announce what they will do ‘in 2026.’

“I remember speaking to a very, very senior member of the Coalition and I told them, look, the tax rate in 2026 isn’t going to be determined by what you put through the parliament in the autumn session 2018,” he said.

“The tax rate in 2026 is going to be determined by what happens in the 2019 election, the 2022 election and the 2025 election.

“I think it is very, very weird. If we can’t deliver on this term so we’re making promises about we’re doing in three terms from now. It’s weird, it’s a parallel universe and if anybody believes it you’re silly.”

Business Council of Australia chief executive Jennifer Westacott, speaking on the same panel, said even when politicians do attempt proper process, they fail.

“The National Energy Guarantee was a good process and a good policy and we still didn’t get it done,” she said.

“Reform is not impossible but the challenge is to focus on real problems. If we are serious about emissions reduction then we should get serious about policies that ensure an orderly transmission to new technologies with a particular focus on dispatch able energy.”

Prime Minister Scott Morrison defended the Coalition’s economic record but conceded he had been working to improve his government’s messaging.

This was after former treasurer Peter Costello stridently attacked the Coalition’s budget performance since 2007.

“I think I’ve set out today, I think very plainly, what we’ve been seeking to achieve,’’ Mr Morrison said.

“And I think we’ve talked a lot over the last three years what we’ve been doing and we have.’’

The past seven weeks had been about providing an improved message.

“Well, you know what, an economic narrative is about what you believe as well,’’ he said.

“And what I’m seeking to do is connect with Australians about what our government passionately believes in.

“And why we think taxes should be lower.

“Why we think some people should not be dragged down and demonised for the simple reality is that they go out there and create jobs.’’