Costello was born in Melbourne, Victoria, where he grew up in the suburb of Blackburn[2] and was educated at Carey Baptist Grammar School (graduating in 1972).

[citation needed] Costello was elected Mayor of St Kilda Council in 1993 and became well known for championing the cause of local democracy and for his clashes with the Premier of Victoria, Jeff Kennett.

[1] Costello's political career ended when his mayoral position was abolished with the whole St Kilda Council in Kennett's reform and consolidation of local government in 1994.

Towards the end of that time, he was approached by the Australian Democrats political party to fill a casual vacancy in the Senate, but decided against it, partly due to the likelihood that this could place him in direct conflict with his brother if Peter became Treasurer.

Costello led fundraising efforts, and World Vision Australia raised over $118 million for relief and rehabilitation programs.

[citation needed] He was made an officer of the Order of Australia in June 2005[12] and was the Victorian nominee for the Australian of the Year award in 2006.

[2] In 2008, Costello received an honorary doctorate from the Australian Catholic University in recognition of "his contributions to religious life and social justice".