Costello's new blow to Opposition

Peter Costello. Photo / Mark Mitchell

CANBERRA - Peter Costello, one-time heir-apparent to former conservative Prime Minister John Howard and Australia's longest-serving Treasurer, quit politics yesterday with a surprise announcement on his website.

Costello decided in June to step down at next year's federal election, but in a move that will add to the burdens of Opposition Leader Malcolm Turnbull, he said he would resign when Parliament resumed on October 19.

Turnbull, who faces the prospect of losing one of his brightest stars after a pre-selection defeat in Queensland at the weekend, already has one byelection on his hands. T

he ailing Liberal Party will soon defend the Sydney seat of Bradfield, which became vacant when Turnbull's predecessor, Brendan Nelson, resigned from Parliament.

Nelson has been appointed Ambassador to the European Union and the Nato defence alliance.

Now Turnbull will also need to defend the Melbourne seat of Higgins, where a former member of Costello's staff, Kelly O'Dwyer, has already been selected as candidate.

Both are blue-riband Liberal seats - Higgins covering a core of wealth around Melbourne's Toorak area, and Bradfield on Sydney's North Shore - but Turnbull could do without the distraction.

He and his party are taking a hammering in the polls and are torn by divisions within the Opposition over Rudd's proposed greenhouse emissions trading scheme.

Shadow Health and Ageing Minister Peter Dutton's future is precarious following the Queensland Liberal National Party's refusal to obey Turnbull and allow him to move from his doomed outer Brisbane seat to a safe Gold Coast electorate.

And opponents within his own party continue to chip away at the leadership.

Yesterday Shadow Treasurer Joe Hockey, frequently named as a potential successor, confirmed on Melbourne Radio 3AW that he had been approached by people wanting to push him into Turnbull's job.

Hockey said he remained loyal to Turnbull - "He's giving it his best shot and I'm totally supporting him in that" - but the fact that he continues to be sounded out bodes ill for the Opposition leader if he cannot impose his full authority on the party.

All this is now behind Costello, who fought his own bitter leadership battle in the final years of the Howard Government.

Elected in 1990, he remained the loyal deputy until Howard reneged on an arrangement that would have seen him step aside gracefully and allow his deputy to take the helm.

As it was, Howard held on grimly and led the Coalition to a crashing defeat that also cost him his own safe Sydney seat.

Costello moved to the back benches where, despite repeated denials, speculation about an eventual contest against Turnbull helped undermine a leader already struggling to keep control.

Costello's announcement yesterday has at least removed that thorn.

He said that he had relished the past two years on the back benches, enabling him to work daily from his suburban electorate office and to spend more time than ever with his constituents.

"I will be sad to say farewell," he said. "Although I will return to private life I hope to continue some measure of service to the public in the future."