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Costello and the Future Fund

March 22, 2012

A piece penned by Michael Egan:

It was Carr, not Costello who was the daddy of the future funds
—by Michael Egan*

Penny Wong’s claim that Peter Costello had “many qualities” had me scratching my head until I remembered that not all qualities are positive.
I dealt with Mr Costello many times during the ten years I was Treasurer of New South Wales. I also dealt with many other Liberal and National Party cabinet ministers at both state and federal levels, including John Howard, Tim Fisher, Mark Vaile, John Anderson, Nick Minchin, Helen Coonan, Jeff Kennett, Alan Stockdale and Kate Carnell, all of whom in my opinion had more positive qualities and fewer negative ones than Costello.

All of us, of course, were partisan political warriors. All of us were devoted to the political demise of the other side. But, as I also found, we all knew when to take off our partisan political hats and work constructively with one another to solve real problems and advance the common good. Except for Peter Costello, who seemed to regard almost every problem, not as something to be solved, but as an opportunity to win cheap political points.

I suspect this was the reason he never had sufficient support among his colleagues to attempt to become Liberal Party leader. On one occasion he called me ostensibly for the purpose of persuading me to drop my opposition to the appointment of Graeme Samuel as Chairman of the ACCC, an appointment which Costello had announced without consulting the states, even though the appointment was one for all governments and not just the Commonwealth. It was a weird conversation. We were the only participants and, at least to my knowledge, no one else was listening. But instead of trying to persuade me, Costello seemed to be playing to an imaginary audience. It was as though he was trying to impress the press or public galleries during question time, or show off in front of his back bench colleagues. There were lots of cheap debating points, but at no stage during a conversation of at least twenty minutes did he listen or make what I would regard as a sensible attempt to persuade. Costello simply couldn’t help himself. He always had to be the smart alec even when no one was watching. I knew then that if that was the way he argued with his own cabinet and party colleagues there was no way they would ever make him their leader.

Costello’s latest dummy spit over the Future Fund chairmanship shows that he is completely full of himself. His claim for the job seems to be that he came up with the idea of the Future Fund. He said recently “….the Future Fund was something that I conceived, I legislated it and I put every dollar of capital into it, every dollar.” Well, whoopee for him! What he forgets though is that the Future Fund was not a new idea but only a new name. New South Wales and most other states have had their own versions of the Future Fund for many years. The Future Fund is nothing more than a fund for putting money aside for the accruing defined benefit superannuation entitlements of public servants. New South Wales had such a fund during all my time as Treasurer. It is called the State Superannuation Pooled Fund and currently has more than $25 billion dollars invested.

In fact, if Bob Carr had not had other things on his mind last week, he could have legitimately laid claim to being the father of these “future funds”. Back in 1984, when Bob was Chairman of the New South Wales Public Accounts Committee it was his landmark report on unfunded superannuation liabilities that spurred the New South Wales Government and other state governments to start putting money aside each year for their accruing superannuation liabilities.

It also seems that Costello is gilding the lily in trying to take sole responsibility for setting up the Commonwealth’s fund. Nick Minchin has pointed out that as Finance Minister he was jointly responsible. Unlike Costello, however, Minchin is not suggesting that this gives him an entitlement to be appointed its chairman.

As Minchin also pointed out, the Future Fund “must be and must be seen to be independent, professional, completely above politics and entirely apolitical”. Quite apart from Costello’s other “qualities”, this is the real reason he could never have been appointed chairman and, as is now obvious, should never been appointed as a guardian in the first place.

Costello’s ineligibility, in my view, has nothing to do with him being a former politician. It has everything to do with his choice, and his choice alone, to continue as a fully-fledged, partisan political head kicker.

Like most big sooks, Costello has very little self-awareness. He seems to think that because he is who he is, he is entitled to have his cake and eat it too. It is time he understood that he cannot aspire to any important non-partisan role if he insists on remaining in the political fray. And as a matter of plain, down-to-earth common sense, it’s time he also learnt that you can’t bite the hand that feeds you.

I have one more piece of gratuitous advice for Mr Costello: when the curtain comes down, get off the stage.

*Michael Egan is the longest serving New South Wales Treasurer, and is currently Chancellor of Macquarie University.

  1. Noel Hadjimichael permalink
    March 22, 2012 9:09 am

    Michael Egan has written a persuasive account.

  2. Paul B permalink
    March 22, 2012 9:20 am

    Great work Michael. You are missed on the political stage but that was a great line about leaving the stage. Hopefully a media outlet will pick this up and it will be published in a newspaper because this article really shows Costello up for what he is. Costello’s performance on 730 was abominable. The only benefit of it was it brought back all the horror of the Howard era with Costello’s arrogance, condescenion and smugness all on full display. And now I learn the Future Fund is not even a new idea. I am not that financially minded but that was very interesting to learn. And it is true – Costello’s articles in the Fairfax press are very partisan and not constructive. The hubris of the man to think he can attack a government relentlessly and then expect to be appointed by the same government to a position he covets. It wouldn’t matter what government was in, Labor or Coalition – it is not a recommended path to gain appointments from that government. Even if you are self appointed legend – it won’t work. Costello really takes the cake and it was interesting to learn how he operated in such a partisan manner when Treasurer.

  3. Margaret permalink
    March 22, 2012 10:02 am

    Just shows that it was a mistake to appoint Mr Costello to the Future Fund Board in the first place.

  4. March 22, 2012 10:27 am

    Oh this is going to be fun! Eagerly awaiting for Costello’s next 7.30 interview!

  5. Chris Cudmore permalink
    March 22, 2012 11:26 am

    Bravo, Michael Egan.
    A welled penned expose of the ‘wannabe’ Prime Minister.

  6. March 23, 2012 5:26 am

    Costello wimped it when he had a chance to be leader of the “great” liberal party. I do not hear of him being a director or chairman of too many public companies thus his business acumen has been judged by corporate Australia to be low-level.

    He would have been an appalling choice.

  7. Ralf Kluin permalink
    March 23, 2012 3:11 pm

    I recall Bob’s work in the NSW Public Accounts Committee. Since 1983, following the great work of the Hawke/Keating Government’s restructure of economic life, the making of a market economy, floating our $A, the accord etcetera, much debate was also had at local government level. ALP members were always championing equality of opportunity, subject to well-balanced regulation for maintaining competition, so that all the Australian people should have an equal chance in life. However, as is also well-known, even amongst many ALP members, most Liberals, like Mr Abbott and Mr Costello, as one tries to interpret their daily political rhetoric; we discover that they are not committed to equality of outcomes at all. Even now, with the mining tax, changes to health care and education etcetera, they vote daily and always to reject good public policy, voted for by the Independent/Greens majority sitting in both houses of Parliament. I’ve yet to discover one piece of major policy designed by Mr Abbott or Mr Hockey and the Liberal/National front benchers, which offers real equality for Australians. At every turn, in State and Local democratic chambers the Liberals deny good policy for ordinary people at every level of social strata, to advance themselves. Take the Howard/Costello “Work-Choices-law” totally designed to transfer great power to the owners of capital who would like nothing less than to employ people with only their labour to sell entirely on their terms of employment.. Mr Keating together with ALP elected Members was responsible for changing our laws and implementing our modern Australian economy. Mr Costello just plodded along adding to the changes, but did he make a fundamental difference as private debt went through the roof? I think not.

  8. Moses permalink
    March 23, 2012 5:49 pm

    It’s Tim Fischer not Tim Fisher.

    Thanks Bob for not letting this blog die.

  9. maximos62 permalink
    March 25, 2012 6:05 am

    Thank you Michael. It’s refreshing to have some rational historical perspective brought to bare. It places Peter Costello’s ‘dummy spit’ in an appropriate context.

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