Australia's last great act of economic courage — Peter Costello

Peter Costello is the longest-serving Treasurer of Australia (1996–2007).

He led the most complex overhaul of Australia's tax system in the postwar era: introducing the Goods and Services Tax (GST) — a value-added consumption tax — while abolishing a range of indirect taxes (notably wholesale sales tax) and cutting income-tax rates.

I wanted to learn from Peter what it actually takes to achieve a reform at that scale — and why we haven’t managed anything like it since.

In this conversation, we discuss:

• GST implementation war stories;
• lessons on how to get big things done in government;
• why major reform became so much harder after 2000;
• why Peter would sometimes hide revenue estimates even from the prime minister; and
• the baby bonus (introduced in 2004), which led to an uptick in Australia's total fertility rate — making Australia one of the only western countries to increase (albeit temporarily) its TFR since the demographic transition began.

 

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