Deal or no deal, Howard should go

I wrote a piece last week saying that this was just another tepid iteration of the same old Howard-Costello story, but things have changed dramatically since then. A former minister, Ian McLachlan, sensationally claimed that Howard had offered to hand over the leadership after 2 terms. Now Costello has just come forward to say that Howard had offered to leave after a term and a half, in order to dissuade the then-Deputy from taking a tilt at the leadership in 1994. In other words, he's calling the PM a liar – a very Green Left Weekly moment.

I've just seen the footage of Costello's press conference. He was far from his usual confident self, with a half-smile on his face showing how clearly he realised the gravity of what he was doing. He also seemed fairly upset, and he seemed to be taking considerable offence at the PM's denial of Ian McLachlan's allegations. I almost didn't recognise him without his usual smirk.

He's unlikely to want to be pressured into leaving by Costello. In fact, this controversy has probably removed any chance of Howard leaving in the next month or two. But it's hard to see how leaving isn't a good idea for the PM. He has to hand over soon to give the Liberals any chance of winning the next election, as another poll is due next year, and the electorate would need to get to know his replacement. So it's really now, or in 2-3 years – and that might not be attractive for a man who would then be approaching seventy.

The other thing is that the Government seems to be running out of puff this year. 2005 finished in a legislative frenzy, with the Coalition using its control of the Senate to push through much all of the legislation that has been on the backburner for years – workplace relations reforms, VSU, the sale of Telstra. Even the ABC has now been largely stacked with conservatives. The only reform on the horizon presently is to the media laws – and the rapidly changing online landscape has reduced their potential impact. The PM has now achieved virtually everything on his long-term agenda, and it's hard to see what else there is left to smash.

What's more, the builders are in at the Howards' home in Wollstonecraft, leading to further speculation that Howard is on the verge of departing.

It's also been a relatively difficult year politically for the PM. WorkChoices has proven enduringly unpopular, with the surprising revelation that there's life in the union movement yet, and the AWB enquiry has substantially undermined credibility in the government. Labor has been regularly performing well in the polls, even though Kim Beazley is hardly spectacular. You can only imagine what a half-decent leader might do.

There is no huge impetus for Howard to retire, and I imagine he won't. The PM's usual response to these situations is to tough it out. His personal popularity is still enormous, and it's highly unlikely the party would want to drop him for Costello, deal or no deal.

But with the next election looming as a difficult fight, I really can't see why he would want to stay.

Here's Radar's latest odds on when Howard will actually leave the building.

• At a time of his choosing – 20/1
• At a time of Janette's choosing – 2/1
• Whenever the party room wants him to step aside for Tony Abbott – 5/1
• When Peter Costello goes under a bus – 250 /1
• When his approval ratings average matches Bradman's 99.94 – 1000/1
• When Labor has a strong, popular leader with a good enough platform to threaten him – 100,000/1
• When his colleagues use WorkChoices to make him do the same job for half the pay – 50/1
• When the renovators finish installing the white picket fence around his Wollstonecraft home – 5/1
• When Richard or Melanie is old enough to take over – 20/1
• When Costello gets the numbers – Never