Peter
Costello looks rattled. He looks desperate. He looks as if he’s fully
aware that he has been holding the purse strings during a period of
unprecedented revenue, unprecedented spending and unprecedented pork
barrelling. And he looks as if he knows he’s been caught.

Backbencher,
former businessman and merchant banker Malcolm Turnbull is far more
qualified than the former barrister to talk about tax and how wealthier
Australians minimise the tax they pay. That’s why this observation on
the 7:30 Report
last night was particularly pertinent: “The reality is that we have a
tax system here and now which means that people with substantial
assets, with businesses and so forth are able to structure their
affairs so that the bulk of their income is earned through
corporations, through companies, which pay a 30% tax rate.”

In this debate, Turnbull has been responsible and, yes, diplomatic. His tax reform paper is an options paper, not a prescription. As he told The Age:
“In order to get a handle on what tax reforms might cost, I have
examined nearly 300 different sets of changes to the personal income
tax system, varying rates and thresholds. My estimate of the likely
cost is very conservative; the costs shown are higher, probably much
higher, than they would be in reality because I have not taken account
of any likely increases in labour market productivity, workplace
participation or compliance.”

That means Costello looked shrill, narky and hectoring when he carried on yesterday on the Today show
about how Turnbull “didn’t actually have a plan, he had 280, so you
know, I am sure if you didn’t like one, there were 279 that you could
look at” – let alone before he made his leadership comments.

Tax policy under Howard and Costello has been about pork, and they’re not alone on this. The Spectator
recently joshed about how Tony Blair and Gordon Brown have done the
same in the UK: “The tax system, they believed, could be operated like
a two-way vacuum cleaner, adapted so that it could blow as well as
suck. Money could move in both directions through the sturdy old PAYE
machine… The proud inventor pushed out variants in every direction –
credits for pensioners, credits for children… Quite soon we would all
be dependent on his credits for our marginal income. Enough of the
money he sucked from our wallets would be blown back to us to buy his
party a perpetual pay-roll vote.”

Peter Costello looks insecure – personally and politically. He looks like anything but prime minister material.