The Joe Walker Podcast Australia's last great act of economic courage — Peter Costello
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Nov 2, 2025 Peter Costello, Australia's longest-serving Treasurer, shares fascinating insights from his tenure. He recounts the complex implementation of the Goods and Services Tax (GST) and cleverly locking in state support to pass it. Costello reveals secrets behind his successful cabinet presentations and the extensive stakeholder outreach required to mitigate opposition. He also discusses the impact of the 2004 baby bonus on fertility rates and reflects on why major reforms have become increasingly difficult since 2000.
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Do Big Reforms Early In Term
- Reform momentum fades across terms as political capital and reforming zeal are exhausted.
- Costello advises pursuing big reforms early in government because it becomes harder later.
Prosperity Invited Fiscal Complacency
- Australia became complacent after paying down debt, inviting politicians to borrow and finance votes instead of pursuing productivity reforms.
- That fiscal ease helps explain why major productivity-enhancing reforms slowed after the reform era.
Specify Every Element Before You Proclaim Reform
- Define reform precisely before announcing it: state rates, thresholds, coverage, trade-offs and expected outcomes.
- Avoid vague promises; produce concrete policy details so the debate is substantive, not wishful.