Rudd Learns From Mistakes as Gillard Told to Quit

Australian Foreign Minister Kevin Rudd, backed by a Labor lawmaker to challenge Prime Minister Julia Gillard as leader, says he’s changed his autocratic style, increasing speculation he’ll bid for a comeback.

“You learn from your mistakes and I’ve made mistakes in the past,” Rudd said in an interview with Sky News after a video of him losing his patience and swearing during his term as prime minister was uploaded on YouTube. “I’ve certainly reflected a lot in the past several years and you’d be a mug if you didn’t learn something from the past.”

Victoria State’s Darren Cheeseman became the first lawmaker in the Labor government to openly call for Gillard, 50, to resign after months of speculation that Rudd, 54, will vie for the job he lost to her in a back-room coup in June 2010. A challenge to Gillard is not “on,” Rudd, who’s out of the country this week, told Sky yesterday.

Since forming a minority government after the August 2010 election, Australia’s first female prime minister has seen her popularity slump in the polls after forging agreements with the Greens party and independent lawmakers on proposed legislation such as a 30 percent tax on coal and iron-ore profits. While she has pushed signature bills through parliament, Gillard has struggled to sell them to the public, including implementing a carbon tax she said before the 2010 election she would oppose.

“There’s an incredible amount of instability in the party and a showdown is needed to stem it,” John Wanna, a professor of public administration at the Canberra-based Australian National University, said in an interview. “Gillard’s not a quitter so Rudd is going to have to try to beat her.”

Swearing, Blaming

Rudd made his comments in an interview broadcast yesterday after a video, uploaded on YouTube on Feb. 17, shows him during his term as prime minister swearing and blaming others for having the wrong wording in a pre-recorded speech in Chinese. The former diplomat is fluent in Mandarin.

“We have a prime minister who is leading us,” Rudd said. “I’m the foreign minister.” Rudd said he has learned to better delegate and consult with staff since his time as leader.

Cheeseman, whose seat is in the same state as Gillard’s, said Labor couldn’t win the next election, due late-2013, with her in charge.

“She will decimate the party if she does,” Cheeseman said in an interview in the Sunday Age yesterday. “The community has made its mind up on her. Certainly, it would be interest-of- party for Julia to stand down and allow Cabinet to select a strong candidate.” Rudd would be a better leader “second time around,” he said.

Strong Support

“I have the strong confidence of my colleagues, their strong support, and my focus is on getting on with my job as prime minister,” Gillard told reporters in Darwin yesterday. She denied her office was responsible for leaking the video.

Rudd has the support 40 of the 52 Labor lawmakers he needs to win a challenge and may do so as soon as next month, The Australian reported Feb. 18, without saying where it obtained the information. Gillard’s backers estimate she has 45 votes, with the rest of the 103 Labor lawmakers undecided, it said.

Gillard’s support among voters as preferred prime minister fell 3 percentage points to 37 percent, with opposition leader Tony Abbott rising 3 points to 40 percent, according to a Newspoll survey conducted Feb. 10-12. The Labor party’s primary vote rose 2 points to 32 percent, behind Abbott’s Liberal- National coalition’s 46 percent. The survey of 1,141 people had a margin of error of plus or minus 3 percentage points.

One-Seat Majority

Gillard faced hurdles last month including independent lawmaker Andrew Wilkie’s decision to withdraw support for the government, reducing its parliamentary majority to one, and opposition demands for an inquiry into Labor’s role in clashes between police and aboriginal protesters.

“I would find it easier to work with Kevin Rudd than Julia Gillard,” Wilkie told Sky News yesterday, adding he had discussed the possibility of Rudd returning as prime minister in a meeting with him in November. “Kevin clearly wants the job back.”

A comeback for Rudd would be a spectacular turnaround in fortunes. Labor lawmakers, spurred by his autocratic style of leadership, moved to depose him on poor poll ratings that were driven by a battle with BHP Billiton Ltd. (BHP) and other miners over his plans for a 40 percent tax on resources profits.

Carbon Tax

The speculation over Labor infighting contrasts with a more successful legislative record under Gillard compared with Rudd, who enjoyed an absolute majority. Her government will implement taxes on carbon emissions and coal and iron ore profits from July 1 as it strives to return the budget to surplus by 2012-13.

The government will raise A$10 billion ($10.7 billion) a year from the carbon tax by charging 500 polluters A$23 a ton for carbon discharges by 2015, when the government-set price gives way to a cap-and-trade system that allows companies that create lower emissions than their cap to then sell unused permits to other polluters.

A 30 percent tax on iron ore and coal profits is forecast to raise A$7.7 billion in the first two years. She had another legislative victory on Feb. 15 when Australia’s lower house passed laws to introduce means-testing of rebates for private- health insurance. Both laws are expected to be approved in the upper house, where her government has the support of Greens, who hold the balance of power.

Growing Economy

The $1.3 trillion economy grew 2.5 percent in the year through the third quarter of 2011, a period that spans the first full 12 months of her leadership, according to the latest figures available from the Australian Bureau of Statistics.

Gillard’s bid to trumpet her government’s economic credentials has been offset by criticism from Abbott, who says Australians can’t afford the carbon tax. The opposition leader has highlighted that last year the nation recorded its worst jobs growth in 19 years as currency appreciation made manufacturers uncompetitive.

Australia’s benchmark S&P/ASX 200 fell 2.08 percent last week, compared with a 0.94 percent gain for the MSCI Asia Pacific Index.

Australia’s export industry has suffered as the local currency strengthened more than 60 percent against the U.S. dollar in the past three years, making products less competitive in overseas markets. BlueScope Steel Ltd. (BSL), the country’s largest steel producer, last August shuttered its export division. Toyota Motor Corp. and General Motors Co. have cut jobs in Australia this year, citing the currency’s strength, while Alcoa Inc. is reviewing the future of an aluminum smelter.

Rate Unchanged

The Reserve Bank of Australia, which unexpectedly left its key rate unchanged at 4.25 percent on Feb. 7 after judging that two cuts late last year would help the economy weather Europe’s debt crisis, sees average growth of 3.5 percent in 2012, down from its Nov. 4 estimate of 4 percent.

Rudd will be overseas for meetings in Washington, Mexico, Somalia, Tunisia and Malaysia until at least Feb. 24, he said in an e-mailed statement Feb. 18. Parliament returns in the national capital, Canberra, on Feb. 27.

Australian bookmaker Sportsbet, which says it’s the nation’s largest online betting agency by revenue, is offering to return A$2.35 on every A$1 bet should Rudd be Labor leader at the next election. A bet on Gillard gets the same price.

“Most Australians are getting pretty sick of the leadership speculation federally,” said Queensland Premier Anna Bligh, who yesterday announced elections for her state will be held March 24. “The sooner this is resolved one way or the other the better.”

‘Happy Little Vegemite’

The 1-minute, 50-second video on YouTube, entitled “Kevin Rudd is a Happy Little Vegemite,” was uploaded by “HappyVegemiteKR,” whose identity isn’t known. Such videos containing errors are usually deleted, Rudd told Sky News.

“Anyone who’s got a touch of suspicion about them would say that if this was done, somewhat embarrassingly, a couple of years ago and it suddenly emerges now, then obviously it’s a little bit on the unusual side,” he said.

The video’s title uses an advertising slogan for the Australian spread Vegemite. In an interview earlier this month when asked if he would return as prime minister, Rudd responded: “I’m a very, very happy little Vegemite and a content Vegemite being foreign minister of Australia.”

To contact the reporter on this story: Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net

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