Rudd Signals He May Challenge Gillard for Labor Leadership

Former Australian Foreign Minister Kevin Rudd signaled he’s considering a challenge to Prime Minister Julia Gillard for the Labor party leadership in a Feb. 27 ballot.

“It’s critical that whoever leads our country has the trust and confidence of the Australian people,” Rudd told reporters at a press conference in Brisbane today. “If you don’t have that, you can’t do anything else.”

When asked directly if he would take on Gillard in the vote, Rudd said he would make a definitive statement on his future later today after consulting with colleagues.

A challenge by Rudd would bring to a head weeks of growing tension in the party, with opinion polls showing the government’s popularity is hovering near a record low. At stake for Labor is survival of an administration that’s unveiled unprecedented taxes on natural resources and fees to address climate change -- an agenda Gillard calls “nation-changing reform” that has proved unpopular with voters.

Gillard, Australia’s first female leader, yesterday said there had been a long-running campaign to undermine her government and that she is best-placed to lead Labor to victory against opposition leader Tony Abbott in elections due in 2013. She sought to head off any attempt by Rudd, 54, to continue his campaign even if he loses the ballot.

Rudd, who landed in Brisbane in his home state of Queensland, resigned as foreign minister at a press conference earlier this week in Washington, where he had been meeting U.S. government officials.

Autocratic Style

Gillard, 50, ousted Rudd as prime minister in a June 2010 party-room coup amid complaints about his autocratic style and concerns about the effectiveness of his government. Yesterday she pledged in a news conference in her hometown of Adelaide to “renounce any ambition” for leadership if she loses and called on Rudd to make a similar commitment.

Labor was 14 percentage points behind Abbott’s Liberal- National coalition in a poll earlier this month, even amid falling unemployment and rising consumer confidence.

“For the last 12 months, Mr. Abbott has been on track to become prime minister of Australia in a landslide,” Rudd said today. “The core question for my parliamentary colleagues, and I believe the Australian people, is who is best equipped to defeat Mr. Abbott at the upcoming election.”

Fear of Reprisals

Rudd, a Mandarin-speaking former diplomat who was prime minister from 2007 to 2010, urged Australians to contact their local Labor lawmakers and express their view on the leadership.

He called on Gillard to guarantee that Labor lawmakers could vote freely in any ballot, without fear of reprisal.

If Rudd challenges, he would need the support of 52 of the 103 lawmakers in the Labor party to beat Gillard and return to the top job. As lawmakers began declaring for either Gillard or Rudd, the Australian newspaper yesterday tallied 65 in favor of the prime minister, with 31 against and seven undecided.

A “decisive” win by the prime minister could “lance the boil and then Gillard can get back to her message of being a good reformer and legislator,” said Malcolm Mackerras, a political analyst at the Australian Catholic University in Canberra. “Then the government might just get back on track and have a chance of winning the next election.”

Abbott, 54, told reporters yesterday his coalition presents a “stable and united team,” and urged holding an early election. The Liberal-National opposition has pledged to scrap the mining and climate-change measures Gillard has pursued. The mining tax has yet to become law, awaiting a vote in the Senate.

Stocks of companies subject to the taxes, scheduled for introduction July 1, were little changed yesterday. The Australian 100 Resources Index rose 0.1 percent to 6,635.16. The local currency bought $1.0711 as of 8:18 a.m. in Sydney, little changed since the end of last week, when it closed at $1.0706. Benchmark 10-year government bond futures traded at 95.905, from 95.895 on Feb. 17.

To contact the reporters 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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