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Abbott: I miss Peter Costello

While dismissing rumours of a return to federal parliament for the former Treasurer, Opposition Leader Tony Abbott suggests some might welcome him back.

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PETER Costello has lashed out at his one-time political backer and confidant Michael Kroger, accusing him of spreading a false and damaging story alleging the former treasurer had tried to strong-arm his way back into  Parliament.

Mr Costello said last night the allegation  that he had tried to push aside a Victorian Liberal MP to relaunch his political career was "lurid", wrong and never happened.

He accused Mr Kroger of having "briefed this story" because his former wife, Liberal senator Helen Kroger, had been demoted on the party's Senate ticket.

Mr Costello said the demotion of Senator Kroger was  "a democratic decision of the Liberal Party, taken by some 400 delegates who exercised their own judgment free of any influence from so-called power brokers".   He added: "The last thing I would ever do is to give a confidence to Michael Kroger."

The ex-treasurer spoke out after the ABC's 7.30 last night reported the allegation that he had been thwarted in a bid to return to federal politics when Josh Frydenberg refused to vacate the plum Liberal seat of Kooyong to make way for him.

Several MPs said Mr Costello broached the idea of returning with Mr Kroger and expressed interest in Kooyong, the seat held in the past by former Liberal leaders Sir Robert Menzies and Andrew Peacock.

According to the MPs' accounts, which are dismissed  by the ex-treasurer, Mr Kroger told Mr Costello in November that he should approach one of his former staffers — either Tony Smith or Kelly O'Dwyer —  if he wanted a seat.

The spreading of the story  was described by one source as "crass payback" for a column by Katharine Murphy  in The Age on Monday documenting the decline of Mr Kroger's influence in the Victorian Liberal Party.

Former Victoria Premier Jeff Kennett this morning dismissed the story as 'rubbish'.

Asked by 3AW’s Neil Mitchell whether he was in the Kroger or Costello camp, Mr Kennett said: "I'm in the Liberal party camp full-square. I think this is all just a bit of rubbish to be quite honest".

Peter Costello

Peter Costello Photo: Paul Rovere

"I don’t deny anyone the opportunity to do with their lives as they see fit, but there is no natural opening there," Mr Kennett said.

"Where would he go in? He could stand for a Labor-held seat at the next election if he wished, but I see Peter infrequently and I have never heard him mention that he wants to go back."

Mr Kennett said he did not believe Mr Costello had asked Mr Kroger to help him get a seat in federal parliament, even if they had perhaps discussed it over lunch or a couple of beers.

Michael Kroger

Michael Kroger Photo: AFP

"Did it have any seriousness? Of course not. Peter is very astute. There is no opening."

The airing of the story confirms the souring of what was one of the most important relationships in conservative politics, with Mr Kroger often acting as an unofficial campaign manager for Mr Costello.

Several Liberal sources close to the former treasurer backed his version of events, with one insisting  the idea  Mr Costello was actively  and energetically seeking a seat — and Mr Frydenberg's in particular — was "nonsense".

Another suggested Mr Kroger was frustrated and making mischief. "There is absolutely not anything in it. It's a complete fabrication." The source said Mr Kroger was on the outer with the Baillieu government and with all but a handful of federal Victorian Liberals.

Another  said: "The idea that Peter would go to Michael and ask for something is utterly unbelievable."

Another Liberal said he believed that the story  "stretches the bounds of credibility".

Others, however, insisted Mr Costello could not bear the thought of Tony Abbott being prime minister, and claimed  he  did not feel very fulfilled in his post-politics business career.

Mr Costello was treasurer for a decade,  his ambition to be prime minister thwarted by John Howard's refusal to make way for him.

Mr Abbott had to intervene this week to prevent Helen Kroger  being dumped as Senate opposition whip following her relegation  on the Liberal Senate ticket.

With MICHELLE GRATTAN and JOSH GORDON and VINCE CHADWICK

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