Australia's Costello to play key election role

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CANBERRA, Sep 13 (Reuters) Australian Treasurer Peter Costello, long seen as an electoral liability, is now central to the embattled Howard government's survival hopes after the prime minister vowed to hand him the leadership if re-elected.

John Howard, 68, faced down a party challenge on Wednesday, defiantly insisting he would spearhead the conservative coalition's re-election bid despite disastrous poll ratings, but would give way for Costello sometime during the next term.

The Australian national newspaper described the move by the 11-year-old government as ''a major strategic shift'' and Costello, 50, came out today selling himself in the media as a leader with a future vision for Australia.

''I hope that I have the opportunity during the campaign to get out and explain to people the forward programme we have,'' Costello told Australia radio.

''I want to be out there talking about it,'' he said, adding that he would focus on taxation, education, environment, water supplies to drought-hit irrigators and the nation's cities.

The government sold the new-look leadership as a move towards generational change that at the same time offered voters the stability of Australia's second-longest-serving prime minister.

''This isn't a one-man show, this is a team effort,'' said Foreign Minister Alexander Downer. ''You are going to get great continuity from this government and strength of teamwork...'' The leadership crisis was brought on by consistently poor poll results showing that the government would overwhelmingly lose the election due by the end of the year, with Howard and several ministers in danger of losing their seats.

Over the past week, government ministers and nervous lawmakers publicly questioned Howard's ability to lead the Liberal Party to a fifth election win, suggesting the prime minister should hand power to the younger Costello.

BLOCKED AMBITIONS Long considered Howard's heir apparent, Costello has regularly seen his ambitions thwarted by the prime minister's refusal to stand aside, while government colleagues have doubted his voter appeal.

Now rather than rely on Howard's personal leadership to win an election, the Liberal Party will campaign on its team credentials, highlighting its widespread ministerial experience against the inexperience of the centre-left Labor opposition.

The move to use Costello more in the campaign will also help the government blunt Labor's attack on Howard as being too old and out of touch, compared to youthful Labor leader Kevin Rudd, who turns 50 next week.

''Peter will be an even more prominent part of the (election) team this time than last time,'' said Health Minister Tony Abbott.

''Peter has been formally anointed, if you like, as the successor and he will obviously be an absolutely critical part of our party and our country's future,'' he said.

Costello has presided over 11 years of economic growth, with near full employment, while delivering surplus budgets and eliminating net government debt.

A former barrister and strong Christian with a young family, Costello supports an Australian republic and has a stronger focus on aboriginal disadvantage and Australia's low fertility rate.

He said it would be difficult for the government to win the election, but said voters would swing back to the government when the election was called.

''People are yet to really consider the issues in an election period. They really have to think very carefully about whether or not they are going to trust an inexperienced team with their business, their mortgage, their job,'' Costello said.

REUTERS JT BST1002

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