Nov. 26 (Bloomberg) -- Australia's newly elected Prime Minister Kevin Rudd vowed to start work this week on ratifying the Kyoto Protocol on climate change and strengthening workers' rights in a booming economy.

Rudd, whose Nov. 24 landslide victory gave John Howard's Liberal Party the worst election defeat in its 63-year history, declined in a press conference yesterday to comment on his pledge to withdraw Australian troops from Iraq.

Howard, 68, who may also have lost his own seat in the rout, supported President George W. Bush in the unpopular war and the U.S.'s refusal to sign the greenhouse-gas reducing Kyoto accord. Rudd's Labor Party helped draft the international agreement when it was last in power; the worst drought in a century helped make the environment a top issue in the election.

``This is the only government around the world kicked out because of its inaction on global warming,'' said Nick Economou, head of the politics faculty at Monash University in Melbourne. ``This is a drubbing for the Liberals and they can look forward to at least two terms in opposition.''

Labor won 83 of the 150 seats in the House of Representatives, gaining 23 seats from 2004, according to the Australian Election Commission. The Liberal-National coalition has 58 seats, with two independents and seven undecided, the commission said on its Web site.

Shares Rise, Gunns Falls

Australia's S&P/ASX 200 Index rose, rebounding from a four- day losing stretch led by commodities companies. Timber producer Gunns Ltd. fell as much as 8 percent on concerns that a planned Tasmanian pulp mill may be blocked following the election. The Australian dollar rose for the third day to 88.10 U.S. cents at 12:59 p.m. in Sydney.

Bush, U.K. Prime Minister Gordon Brown and Indonesian President Susilo Bambang Yudhoyono were among the leaders who called to congratulate Rudd.

Rudd, who has promised to withdraw Australia's 1,575 troops from Iraq starting in mid-2008, said he would visit Bush ``as early as possible,'' and reiterated the ``centrality'' of the U.S. alliance in Australian foreign policy.

He also accepted Yudhoyono's invitation to the United Nations Climate Change Conference in Bali in December, and said Australia would work closely with Britain on the environment and issues including development aid.

New Ministers

Rudd will appoint his cabinet after the Labor Party's lawmakers meet on Nov. 29 in Canberra.

``I will be determining the ministry myself,'' he said, declining to say who will get what jobs. Wayne Swan will become treasurer and Lindsay Tanner will become finance minister, Rudd has said.

A former diplomat who speaks fluent Mandarin, Rudd has also promised closer ties with Asia and was invited to Beijing for the 2008 Olympics by Chinese President Hu Jintao when they met in September.

The son of a tenant farmer in Queensland, Rudd graduated with a first class honors degree in Asian studies from the Australian National University before becoming a diplomat in Stockholm and Beijing between 1981 and 1988. He worked for the Queensland state Labor Party before entering parliament in 1998.

Rudd yesterday said his priorities include improving Australia's education system, hospitals, and infrastructure such as high-speed Internet connections, helping working families on issues like childcare, climate change and industrial relations.

Voters were attracted to Rudd's pledge to abolish the government's workplace laws, which prompted 500,000 people to march in protest in 2005. The reform eliminated unfair dismissal rules and made it harder for workers to strike.

``Rudd was able to embody a new agenda around education, climate change, the embodiment of the notion of new leadership in a younger man looking toward issues of the future,'' said Murray Goot, a professor at Macquarie University. ``The coalition under Howard opened up an issue for Labor that had never existed before, not at least under Howard's leadership, which was industrial relations.''

Senate Politics

Labor will have to negotiate with other parties in the Senate, where the balance of power will be held by five Greens senators, the sole Family First representative and anti-gambling independent Nick Xenophon, according to Australian Broadcasting Corp. projections.

The Liberal Party may not offer much resistance to Rudd initially, as its most senior elected official is now Campbell Newman, mayor of Australia's third-biggest city, Brisbane. Labor controls all eight Australian states.

Howard, the nation's second-longest-serving leader, said on Saturday he would likely lose his own seat of Bennelong in Sydney, making him the first Australian prime minister to be voted out of parliament in 78 years.

Outgoing Treasurer Peter Costello, Howard's Liberal Party deputy and anointed successor, said yesterday he would not contest the leadership and would quit politics after his current parliamentary term of some three years.

Borrowing Costs

Howard's bid for a fifth term faltered when his claim to be a better economic manager than Rudd -- one of the central planks of his campaign -- was undermined by the first interest rate increase during an election campaign.

The quarter-point increase lifted the Reserve Bank's benchmark rate to an 11-year high 6.75 percent, and was the sixth since Howard was returned to power in the 2004 election on a promise to keep mortgage rates low.

Rudd, Labor's fourth leader since Paul Keating lost the 1996 election to Howard, becomes Australia's 30th prime minister. Labor's victory is only the seventh time voters have ousted their government since the beginning of World War II.

To contact the reporter on this story: Gemma Daley in Sydney at gdaley@bloomberg.net

Last Updated: November 26, 2007 03:16 EST