Ministers Back Australia’s Gillard as Coup Speculation Mounts
Feb. 20 (Bloomberg) -- Australian Prime Minister Julia Gillard faces rising speculation the predecessor she ousted will bid for a comeback, as her party trails in polls after pushing through unpopular climate-change and mining-tax measures. Foreign Minister Kevin Rudd said at the weekend he has learned to better delegate and consult with staff. A video, uploaded on YouTube on Feb. 17, shows Rudd during his term as prime minister swearing and blaming others for having the wrong wording as he tried to pre-record a speech in Chinese. Daniel Petrie and Rishaad Salamat report on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Senior Cabinet ministers rallied behind Australian Prime Minister Julia Gillard today as speculation intensified that Foreign Minister Kevin Rudd would seek a comeback and challenge for the premiership.
A lawmaker in the governing Labor Party, Darren Cheeseman, broke ranks yesterday to openly call for Gillard, the nation’s first female leader, to quit and hand the job back to Rudd. The foreign minister used an interview broadcast at the weekend to say he’s changed the autocratic style that helped lead to his downfall in a back-room party coup in June 2010.
Rudd has “either got to put up or shut up,” Simon Crean, a former Labor leader who is minister for regional Australia, told Australian Broadcasting Corp. radio today. “If Kevin Rudd can’t be part of the team, let him exit the team.”
Since forming a minority government after the August 2010 election, Gillard, 50, 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.
A “small group” of Labor lawmakers is destabilizing the government with speculation about the leadership, Trade Minister Craig Emerson told the ABC.
‘Showdown Is Needed’
“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.”
Labor lawmaker Cheeseman said yesterday the party couldn’t win the next election, due late-2013, with Gillard in charge. His seat, in the same state of Victoria as Gillard’s, is the most marginally held in Australia.
“Certainly, it would be interest-of-party for Julia to stand down and allow Cabinet to select a strong candidate,” Cheeseman said in an interview in the Sunday Age yesterday. Rudd would be a better leader “second time around,” he said.
A comeback for Rudd, 54, 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.
YouTube Video
Rudd said at the weekend he has learned to better delegate and consult with staff. 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 as he tried to pre-record a speech in Chinese. The former diplomat is fluent in Mandarin.
The foreign minister will be overseas for meetings in Mexico, Washington, London, Tunisia and Malaysia until about Feb. 26, according to his office. Parliament returns in the national capital, Canberra, the next day.
“We have a prime minister who is leading us,” Rudd said in an interview with Sky News broadcast yesterday. A challenge is not “on,” he said.
Rudd has the support of 40 of the 52 Labor lawmakers he needs to win a challenge and may do so as soon as next month, the Australian newspaper 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.
Tallying Support
“Kevin hasn’t got the numbers to challenge,” Crean told the ABC today. “He’s well short of anywhere near a majority.”
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 46 percent for Abbott’s Liberal-National coalition. The survey of 1,141 people had a margin of error of plus or minus 3 percentage points.
“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, a former union lawyer, told reporters in Darwin yesterday. She denied her office was responsible for leaking the YouTube video.
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.
Legislative Record
“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.”
Gillard’s legislative record is more successful than Rudd’s, whose government had an absolute majority in parliament. She plans to implement taxes on carbon emissions and coal and iron ore profits from July 1 as her government strives to return the budget to surplus by 2012-13.
The government will charge about 500 polluters A$23 a ton for discharges until the set price gives way to a cap-and-trade system in 2015. A 30 percent tax on iron ore and coal profits is forecast to raise A$7.7 billion ($8.3 billion) in the first two years.
Gillard had another legislative victory on Feb. 15 when Australia’s lower house passed legislation to introduce means- testing of rebates for private-health insurance. That and the mining tax bill are expected to be approved in the upper house, where the Greens hold the balance of power.
Growing Economy
Australia’s A$1.4 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 Gillard’s 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.
“Every day the coalition is preparing for government while the government is preparing for another leadership change,” Abbott told reporters in Sydney today. “What we need is a government that is getting on with the job, not a government that’s in the business of cannabalising itself.”
Job Losses
The Australian dollar has 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, in 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.
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.
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 is campaigning for state elections on March 24. “The sooner this is resolved one way or the other the better.”
To contact the reporter on this story: Jason Scott in Canberra at jscott14@bloomberg.net
To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net
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