Aug. 12 (Bloomberg) -- Tony Abbott, whose Liberal-National coalition is ahead in polls before Australia’s Sept. 7 election, pledged to build a stronger economy as he faced Prime Minister Kevin Rudd in the first leaders’ debate of the campaign.
Eradicating the levy on mining profits and reducing the company tax rate, at a time when government revenues are declining, wouldn’t lead to major cuts in services, Abbott, 55, said late yesterday in Canberra. Rudd, 55, said a coalition-led government faced a A$70 billion ($64 billion) funding black hole that would lead to job losses.
“This idea that the coalition is ready with a great big scalpel to slash health, to slash education, to slash jobs is simply wrong,” Abbott said in the live televised debate. “Yes, revenues are under pressure. What we need to do is grow a stronger economy. That’s why it’s so important to reduce unnecessary taxes.”
Both leaders have put management of the world’s 12th-largest economy at the center of their campaigns amid slowing growth as a China-led mining-investment boom wanes. While Rudd has narrowed the margin in opinion polls since defeating Julia Gillard in a June 26 Labor party ballot, Abbott remains on track to win government.
“There are real warning signs out there for Labor,” said Zareh Ghazarian, a political analyst at Melbourne’s Monash University. “Rudd’s return to the leadership has brought the party’s core back into the fold but it looks like it will be hard for him to win over the swinging voters who are deterred by the government’s record.”
As the election campaign enters its second week, the ability of Abbott and Rudd to lure votes with spending promises is hampered by dwindling revenues. The Treasury said Aug. 2 that revenue collected over the next four years will be about A$33.3 billion less than it had previously forecast in May.
Abbott narrowed the gap with Rudd on the question of preferred prime minister, according to a Newspoll published in The Australian newspaper today. In the survey conducted Aug. 9-11, Abbott rose four percentage points to 37 percent, while Rudd dropped 1 point to 46 percent.
The coalition maintained its 52 percent to 48 percent lead over Labor in the two-party preferred measure, the poll showed. Labor’s primary vote fell two points from the previous poll a week earlier to 35 percent, the coalition rose two points to 46 percent, and the Greens also gained two points to 11 percent.
The survey of 1,134 voters has a margin of error of plus or minus 3 percentage points. Newspoll is 50 percent owned by News Corp. Australia and 50 percent by Millward Brown Inc., a market-research company.
A Galaxy Research poll published by Sydney’s Sunday Telegraph newspaper yesterday showed Labor trailing the opposition with 49 percent in the two-party preferred measure, down from a 50-50 tie in the last such study conducted July 23-25. A Nielsen poll in Fairfax Media Ltd. newspapers at the weekend showed the opposition leading with 52 percent of the vote after tying in the previous survey a month earlier. Fifty-six percent of respondents said the opposition would manage the economy better, to 36 percent for Labor.
The two-party preferred measure is designed to gauge which party is more likely to form a government under Australia’s preferential voting system.
“The Australian people, if they were voting yesterday, according to opinion polls, would have elected Mr. Abbott as prime minister,” Rudd said in the debate. “Surely four weeks before an election he can stop being evasive about where the A$70 billion of cuts to jobs, to health and education will fall.”
Australia’s government is raising taxes on tobacco, charging banks a fee for deposit insurance, and tightening tax breaks for business car use as the country’s budget deficit is forecast to blow out to A$30.1 billion this fiscal year, about 1.9 percent of gross domestic product.
Abbott needs to spell out where he will raise taxes and cut spending to meet commitments to improve the country’s debt position relative to the government’s forecasts, Rudd said. The opposition last week promised to implement a 1.5 percentage point cut to the company tax rate.
In its quarterly monetary policy statement released in Sydney Aug. 9, the central bank said gross domestic product will rise 2.25 percent in the year to December, down from a forecast of 2.5 percent growth three months earlier. Governor Glenn Stevens and his board reduced Australia’s key interest rate to a record-low 2.5 percent last week amid benign inflation and a slowing in mining investment.
Away from economic issues, Rudd promised that should he be re-elected he would introduce a bill to legalize same-sex marriage this year and allow his lawmakers a conscience vote on the issue.