Leadership tensions in Australia
Prime Minister John Howard today insisted that he and Treasurer Peter Costello were still a team, despite an apparent leadership tussle that could undermine a decade of economic growth in Australia.
Howard and Costello met at a federal Cabinet meeting in Sydney today – their first meeting since Costello accused the prime minister of breaking a promise he allegedly made 12 years ago to hand over control of the dominant Liberal Party after one and a half terms.
The prime minister has repeatedly denied making any such pledge.
Speculation was rife in the Australian media today that Costello’s accusation marks the beginning of a leadership challenge that could spell the end of Howard’s 10-year reign.
However, some analysts have suggested that Costello does not have sufficient backing to oust Howard, and may even be forced to resign from his treasury post if he fails.
Howard dismissed those suggestions after his Cabinet meeting, saying his partnership with Costello was as strong as ever.
“I do not believe that the professional relationship between Mr. Costello and me has broken down,” he told reporters. “It has been a very successful partnership and I intend to continue to work in a professional manner.” He said the two politicians would continue in their current roles.
“It is the overwhelming desire of the parliamentary Liberal Party that Mr. Costello and I remain in our positions,” Howard said.
Together Howard and Costello have overseen one of Australia’s longest periods of economic growth, and some analysts said that a prolonged leadership stand-off could leave the economy on shaky ground.
Cherelle Murphy, a markets economist with ANZ Bank, said a change in either the prime minister or the treasurer would have a negative impact on the Australian dollar and local stock market “given the current leadership team has ruled over the largest part of the most recent economic expansion and never seen a recession.”
“There’s no question that markets will want to know who is going to lead the country,” said Tony Hughes, a senior Asia Pacific economist for Moody’s Economy.com. “There is a significant question mark over whether Costello will remain treasurer in the short term and who would replace him if he had to go.”
Howard dismissed suggestions that Costello should resign over the spat, but the prime minister refused to be drawn on whether he would stand again at federal elections due next year.
“I think it is self-evident that Mr. Costello would like to succeed me,” Howard said. “I have indicated to him that I’ve always indicated that, in the end, it is the will of the party and the interests of the party that is paramount.”
