Peter Howard Costello (born 14 August 1957) is an Australian former politician and barrister who served as the treasurer of Australia from 1996 to 2007 and the deputy leader of the Liberal Party from 1994 to 2007. He was the member of parliament (MP) for the Victorian division of Higgins from 1990 to 2009.
In 2008, Costello was appointed as chairman of the World Bank's new Independent Advisory Board (IAB) to provide advice on anti-corruption measures. He served as Chairman of Nine Entertainment from 2016 until 2024. Costello is Chairman of the Board of Guardians of Australian Future Fund.
Costello was born on 14 August 1957 in Melbourne into a middle-class family of practising Christians. He was the second of three children; his elder brother, Tim, is a prominent Baptist minister and former CEO of World Vision Australia. Costello was educated at Carey Baptist Grammar School (graduating in 1974) and Monash University, where he studied arts and law, graduating with honours in 1982. Costello is a descendant of Irish immigrant Patrick Costello, who was expelled from the Parliament of Victoria in the 1860s for electoral fraud.
During the 1980s, Costello was a solicitor at the law firm Mallesons Stephen Jaques, then became a barrister and represented employers in some of Australia's best-known industrial relations disputes.
In 1982, Costello married Tanya (née Coleman), daughter of writer and former Liberal politician Peter Coleman and historian Verna Coleman.
In 1983 and 1984, Costello represented the National Farmers' Federation in legal action against the Australasian Meat Industry Employees Union (AMIEU). The AMIEU was seeking a unit tally system to be set up in abattoirs in the Northern Territory. The dispute focussed on one abattoir, Mudginberri, which chose to fight the AMIEU claim. Ultimately the AMIEU claim was unsuccessful.
Costello became counsel to organisations representing small business and rose to prominence in the 1985 Dollar Sweets case, as junior counsel assisting Alan Goldberg QC, successfully representing a confectionery company involved in a bitter industrial dispute.
In his student years, Costello was active in student politics. For a time, he was an office-bearer of the Social Democratic Students Association of Victoria, an affiliate of the Balaclava Branch of Australian Young Labor. In 1977, Costello was assaulted by a left-wing student politician, receiving mainstream media attention for the first time in his career as a result.
After graduating, Costello became more conservative but retained progressive views on some social issues. In 1984 he was a founding member of the H. R. Nicholls Society, a think tank on industrial relations. In the late 1980s, he was identified as part of the New Right movement, which was organised to some extent in the H. R. Nicholls Society.
In 1990, Costello defeated sitting member Roger Shipton in a preselection ballot for the comfortably safe Liberal inner-east Melbourne electorate of Higgins, the seat once held by Harold Holt and John Gorton. He entered the House of Representatives at the age of 32. Costello made his maiden speech in May 1990 and mentioned "government should be subservient to the citizen; the Executive accountable to the representative parliament; and the monopoly give way in the face of the individual."
Following the resignation of Andrew Peacock, Costello voted for John Hewson to replace Peacock as Liberal Leader and Costello was made shadow minister for Consumer affairs and later Shadow Attorney General. However, Hewson, despite launching Peter's local campaign in Higgins, was said to have been suspicious of Costello due to his admiration for John Howard; and is alleged to have made it clear to Costello that he would not be appointed a Minister in a Hewson government.
On one occasion Hewson accused Costello of bad mouthing him to journalist Laurie Oakes, which Costello denied.
Hewson's shock defeat at the 1993 election, Costello believes, can be attributed to Hewson lacking the experience to know which things to try to change and which things to avoid trying to change. Costello believed Hewson fought everyone from Churches and Welfare groups over the GST to the Superannuation and Medicare organisations and recipients. Costello claimed he found it hard to promote the Liberal party's zero Tariff policy to the car industry.
Costello developed a higher profile following the 1993 election, becoming Shadow Finance Minister (though apparently failing to become deputy Liberal Party leader). Costello came to be seen as an alternative leader to Hewson, especially through, but not limited to, the "sports rorts affair" where, at the urging of Costello and Hewson, Sport Minister Ros Kelly was forced to resign after it was revealed she had not handled sports' funding proposals properly. Hewson was deposed as Liberal leader in May 1994, Costello supported Alexander Downer for the leadership, becoming his Deputy Leader and shadow Treasurer. But what may well have prevented Costello from challenging Hewson for the leadership himself was an accusation by Victorian Liberal Premier Jeff Kennett that Costello and his friend, former Victorian Liberal party president Michael Kroger, had undermined Hewson's leadership prior to Hewson calling the leadership spill.
However, when Downer in turn resigned in January 1995. Costello did not seek the leadership, instead supporting John Howard. It was later alleged—in July 2006—that this was due to a December 1994 meeting of Howard, Costello and Ian McLachlan in which Costello is said to have agreed not to challenge for the leadership in 1995 and Howard is said to have agreed to stand aside after one and a half terms as prime minister for Costello to take over. Howard denied that this was a formal arrangement.
In 2009, Hewson stated that Costello's best chances of becoming leader were at the 1994 leadership spill (which Hewson noted with irony) or when Downer stood down 7–8 months later.
Costello became the longest serving Deputy Leader in 2006, breaking the record held by the party's first Deputy Leader Sir Eric Harrison. He also spent all but the last two years of his political career on the front bench.
The Liberal/National coalition headed by Howard won the 1996 election, defeating the Keating government on a 29-seat swing, and Costello became Federal Treasurer at age 38, the same age at which Howard himself had become treasurer in 1977. He oversaw the return to and maintenance of federal budget surpluses, which enabled significant reduction in government debt. Costello brought down twelve consecutive Federal Budgets, including ten surpluses. During this period he eliminated the Commonwealth Government net debt of $96 billion. He also sold 2/3rds of the Reserve Bank's substantial gold holdings at a record low price. Inflation, interest rates and unemployment all fell and remained generally low during Costello's term as Treasurer.