Gillard Keeps Power by Ceding Ground to Australia Independents
Julia Gillard, Australia's prime minister
Joseph Lafferty/Bloomberg
Julia Gillard, Australia's prime minister.
Julia Gillard, Australia's prime minister. Photographer: Joseph Lafferty/Bloomberg
Julia Gillard held on to power as Australia’s first female prime minister after two independent lawmakers agreed to prop up a minority Labor Party government to resolve the country’s closest election in 70 years.
“Labor is prepared to deliver stable, effective and secure government for the next three years,” Gillard, 48, told reporters in Canberra yesterday. “I know that if we fail in this solemn responsibility, we will be judged harshly when we next face the Australian people.”
Gillard was forced to negotiate power-sharing agreements with the Greens Party and three independents after losing her party’s overall majority in the Aug. 21 election. Consensus building on future legislation may make it harder to meet campaign pledges to tax iron ore and coal projects, set penalties for emissions and overhaul immigration.
“The government will have to spend a lot of money placating these independents and they will end up with compromised policies,” said Su-Lin Ong, senior economist at RBC Capital Markets Ltd. in Sydney. “Neither the mining resource tax, climate policy or immigration platform will remain intact.”
Independents Robert Oakeshott and Tony Windsor, who represent districts outside major cities, agreed yesterday to back Gillard in return for A$9.9 billion ($9.1 billion) of investment in rural areas to improve health care and education. Their support, which prevented opposition leader Tony Abbott from taking power, only extends to passage of the national budget and a guarantee not to vote down a Gillard government.
“For our country’s sake, I hope the Labor Party can provide a better government in this term of parliament than it has over the last three years,” Abbott said in Canberra.
Aussie Falls
The Australian dollar slumped to 91.02 U.S. cents in Sydney yesterday from 91.76 cents on Sept. 6. Gillard’s agreement with independents added to losses triggered when the Reserve Bank of Australia kept the benchmark interest rate unchanged and said the global outlook remains uncertain.
“The Aussie dollar is also a bit weaker at the moment because of the political uncertainty,” said Katie Dean, a senior economist at Australia & New Zealand Banking Group Ltd. in Melbourne.
Wayne Swan, Gillard’s deputy, said yesterday the government remains committed to introducing its levy on mining projects operated by companies such as BHP Billiton Ltd. and Rio Tinto Group to help pay for infrastructure, improved retirement benefits and a corporate tax reduction. Oakeshott said he would like an “open public discussion” on the proposed 30 percent levy and Gillard acknowledged that she had no guarantee that parliament would pass the proposal.
Rio fell 0.9 percent in Sydney yesterday; BHP dropped 0.3 percent.
Ousting Rudd
Gillard, who alienated some Labor supporters by ousting predecessor Kevin Rudd in June and watering down his mining proposal, avoided becoming the shortest-serving prime minister in 42 years. She will be joined by about 34 female lawmakers in the 150-member lower house, electoral commission figures show. There are about eight women chief executive officers among Australia’s 200 largest companies.
Gillard was born in the Welsh town of Barry and moved to Australia as a four-year-old. A former student activist, she made her name as a lawyer with Slater & Gordon in Melbourne before winning a parliamentary seat in 1998. As Rudd’s deputy she oversaw the A$16.2 billion schools program that she described last month as a “mess” that attracted contractors who overcharged.
Trustworthiness
Abbott, 52, opposed Gillard’s mining tax and attacked her trustworthiness during the campaign, a charge that resonated with voters who grilled her last month about Rudd’s ouster in a televised town hall meeting. Abbott also campaigned with his wife and family to highlight differences with Gillard, who isn’t married and has no children.
Oakeshott and Windsor joined the sole Greens Party member of parliament and a fellow independent in agreeing to back Gillard, giving her the minimum 76 seats needed in the 150-seat lower house to form a government. One seat claimed by Labor remains too close to call, according to the Australian Electoral Commission. Labor had a 12-seat majority before the election.
“The coalition won more seats and more votes than our opponents but sadly we did not get the opportunity to form a government,” Abbott said. “Obviously I’m disappointed about that, but that’s our system.”
Gillard said the next round of health and hospital funding would be “dedicated to rural Australia.” Priority will also be given to education and building a national broadband Internet network to cover rural districts, she said.
Broadband Plans
Both Windsor and Oakeshott said the need to develop Australia’s broadband coverage and address climate change were key considerations during two weeks of negotiations.
“It isn’t winner takes all, it is much more truly representative of Australians,” Greens leader Bob Brown told reporters in Canberra. “We’re going to be working as a team to bring stability and innovation.”
Charging companies for pollution and building a A$43 billion National Broadband Network were among Gillard’s campaign cornerstones. Telstra Corp., the nation’s biggest phone company, will phase out its copper-wire network as part of the broadband plan.
“This is not a mandate for any government, we will continue to be strong independents,” Oakeshott told reporters in Canberra. “Australia is divided, but it is engaged.”
To contact the reporters on this story: Gemma Daley at gdaley@bloomberg.net; Marion Rae in Canberra at mrae3@bloomberg.net
Rate These Stories
Rate this Page