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Gillard’s Labor Loses Support After Australia Carbon Tax Enacted

Australian Prime Minister Julia Gillard’s administration saw public support fall as it implemented taxes on carbon output and mining that stirred opposition from business leaders.

The Labor party was favored by 28 percent in a Newspoll survey published in the Australian newspaper today, down 3 percentage points from two weeks ago, compared with 46 percent for the Liberal-National coalition. Taking second-preference votes into account, Labor was 12 points behind the opposition.

The results signal that Gillard’s budget strategy of boosting aid to lower- and middle-income families has failed to pay off amid rising unemployment and a drop in business confidence. While Gillard’s match-up with Liberal-National chief Tony Abbott is more competitive than her party’s, the persistent gap risks reviving challenges to her leadership.

“The primary vote for Gillard is diabolical and her party looks to have no chance of winning the next election,” said Zareh Ghazarian, a political analyst at Monash University in Melbourne. “Labor was promising they’d bounce back after voters saw the carbon tax in action but voters just aren’t interested anymore and have stopped listening. A new leader may not help but it’s probably the party’s only option.”

Photographer: Patrick Hamilton/Bloomberg

Julia Gillard, Australia's prime minister. Close

Julia Gillard, Australia's prime minister.

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Photographer: Patrick Hamilton/Bloomberg

Julia Gillard, Australia's prime minister.

The poll is the first time Labor’s primary vote has fallen below 30 percent since April 27-29. It reached a record low of 26 percent in September.

Trailing Abbott

Gillard, Australia’s first female prime minister, trails Abbott by 4 percentage points as the nation’s preferred leader ahead of elections that must be held by November 2013, according to the Newspoll survey. The poll of 1,158 people, conducted July 20-22, had a margin of error of plus or minus 3 percentage points.

“Government is about getting the hard things done that set our nation up for the future,” Gillard told reporters in Sydney today. “You can’t be obsessed by opinion polls. The poll that matters is election day in 2013.” She will be Labor’s leader at that election, she said.

After the closest election in seven decades, Gillard put together a minority government in September 2010 with support from independents and Greens. She backtracked on a promise not to tax carbon emissions, implementing the levy on July 1 along with new taxes on iron ore and coal mining profits. Abbott has vowed to repeal the laws should he win power.

Low Support

In a separate survey released today by the Climate Institute, 28 percent said they supported Gillard’s climate pricing legislation, with 52 percent disagreeing and 20 percent uncertain. Support for Abbott’s coalition to repeal the legislation was at 48 percent, it showed.

The poll’s quantitative research element was conducted by the Ipsos Social Research Institute from 1,131 Australians participating online on May 23-30, with no margin of error provided. The Climate Institute describes itself as an independent research organization funded by philanthropy seeking a zero-carbon global economy.

Since defeating predecessor Kevin Rudd in a leadership ballot in February, Gillard’s government has been weakened by lawmaker scandals that have eroded Labor’s control of parliament.

Speculation that Rudd would mount a new challenge have resurfaced after the Australian Financial Review reported yesterday the head of the union movement, Ged Kearney, had discussed the possibility at a recent meeting.

“Populism matters in politics and no matter what political party you’re talking about, if leaders remain unpopular long enough, they’ll inevitably stop leading the party,” Labor’s whip, Joel Fitzgibbon, said in a July 16 Australian Broadcasting Corp. television program, according to a transcript.

Less Optimistic

Gillard said in a July 15 speech she will contest next year’s federal election on her record of economic management. The government unveiled a budget on May 8 that aims to return to a surplus next year and scrapped a planned cut in company taxes to fund payouts for low- and middle-income earners.

Australian businesses grew less optimistic about near-term prospects, signaling a slowdown in the fastest-growing developed economy, a National Australia Bank Ltd. (NAB) survey released July 19 showed. The business conditions index for the next three months dropped to 5, the lowest reading since the second quarter of 2009.

Gillard may have won a reprieve from an imminent leadership challenge after results showed Labor winning the seat of Melbourne in a Victoria state government by-election held at the weekend. Labor candidate Jennifer Kanis leads the two-party preferred vote with 51.4 percent, with Greens candidate Cathy Oke on 48.6 percent. The Liberal-National coalition didn’t contest the seat.

“Admittedly the polls are hard for us,” Employment Minister Bill Shorten said in an Australian Broadcasting Corp. television interview yesterday. “Whilst it’s always good to be popular, I think what people want is tough leaders for the times.”

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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