Australia’s 14.7 million voters cast ballots tomorrow to decide whether Prime Minister Kevin Rudd or opposition leader Tony Abbott is best placed to steer the world’s 12th biggest economy through a slowdown as a mining-investment boom wanes.
With Rudd’s Labor party and Abbott’s Liberal-National coalition embracing similar policies on issues including education, disability care and immigration, economic management has been the defining difference between them in the five-week campaign.
Labor has trailed in opinion polls for most of the past three years, since forming a minority government in 2010. The coalition leads by 8 percentage points on a two-party preferred basis, on 54 percent to Labor’s 46 percent, according to a Newspoll published in the Australian newspaper on Sept. 2. The survey had a margin of error of 3 percentage points. The two-party measure is designed to show which party is most likely to win a majority of seats.
Rudd, 55, was elected to the national parliament in 1998 and became Labor leader in 2006. After winning office in 2007, his government guided Australia recession-free through the global financial crisis. The Mandarin-speaking former diplomat was ousted by his deputy Julia Gillard in a June 2010 party room coup amid slumping poll ratings and complaints from colleagues about an autocratic style. The married father of three regained the leadership in a party room vote on June 26.
Abbott, 55, has led the coalition since 2009, after serving in John Howard’s 1996 to 2007 government in portfolios including employment and health. The Rhodes scholar has degrees in economics and law and trained as a Catholic priest from 1984 to 1987. He worked as a journalist and concrete-plant manager before becoming press secretary to then-opposition leader John Hewson and entered parliament in 1994.
Lawmakers in the 150-member lower House of Representatives, from which the government is formed, serve three-year terms. Labor currently has 71 seats and has governed since 2010 with the support of independents and the Greens party. The coalition has 72 and needs to win four more to take office in its own right.
Votes are cast from 8 a.m. to 6 p.m. and the results are usually known within a few hours. There were 14,712,799 people enrolled to vote as of Aug. 16, up by more than 624,000 since 2010, according to the Australian Electoral Commission. Voting is compulsory for anyone aged 18 or over and there is a A$20 fine for not casting a ballot.
Under the electoral system, voters rank candidates for lower house seats in order of preference. If a candidate gets more than 50 percent of first-preference votes, he or she is immediately elected. If no candidate has an absolute majority, the one with the fewest votes is excluded and their votes are transferred according to the next preference shown by voters on the ballot paper. The process of preference distribution continues until a candidate has a majority.
Of the 76 seats in the upper house Senate, 40 are up for grabs. Most senators are elected for a six-year term. The coalition currently has 34 seats, Labor 31 and Greens and others a cumulative 11. Senators are elected to represent their state or territory through a proportional system that increases the chances of minor parties and independents winning seats. The government of the day has controlled the Senate in just three of the past 30 years.
Rudd is selling himself as the best leader to steer Australia through a downturn as he flags the end of a China-led mining investment boom. Labor is pledging to bring the budget back into the black with a A$4.2 billion ($3.8 billion) surplus in 2016-17 and is eschewing deeper spending cuts to safeguard jobs, with unemployment forecast by Treasury to rise to an 11-year high of 6.25 percent next year.
Abbott is pledging a surplus equivalent to 1 percent of gross domestic product within a decade. He says Labor has mismanaged the economy and has identified about A$40 billion in savings over four years, including cutting 12,000 public service jobs.
CARBON PRICING AND MINING TAX:
Labor is pledging to scrap the fixed carbon price, set at A$25.40 a ton for 2014-15, and move to a cap-and-trade system a year ahead of schedule in 2014. The coalition is vowing to scrap carbon prices altogether, calling it a “toxic tax.”
The fixed price on emissions for about 300 of Australia’s largest polluters was planned by Gillard to reduce the country’s reliance on coal and to help meet the target for a 5 percent cut in greenhouse gas emissions from 2000 levels by 2020.
Abbott is also promising to scrap the Minerals Resource Rent Tax, a 30 percent levy on coal and iron-ore profits.
Rudd has toughened Labor’s stance against refugees arriving in Australia by boat since retaking office in June and is sending undocumented asylum seekers to camps in developing nations such as Papua New Guinea. Abbott has proposed a military-led response that involves escorting boats out of Australian waters and joint operations with Indonesia, Sri Lanka and Malaysia to disrupt people smugglers.
NATIONAL BROADBAND NETWORK:
The coalition is pledging a A$30 billion national broadband network that’s cheaper than the A$44 billion high-speed Internet fiber-optic network being built by state-owned NBN Co. While the government’s plan is for broadband fiber to be connected to homes, under the coalition’s fiber-to-the-node model, the connection would be as much as a kilometer away from houses, which would be linked by copper wire.
PAID PARENTAL LEAVE:
Abbott has promised to provide new mothers with six months’ paid leave in line with their income, capped at an annual salary of A$150,000. The coalition plans to fund the policy with a 1.5 percent levy on companies with a taxable income of A$5 million or more.
Labor says the plan is inequitable and will maintain its policy of providing new parents with as much as 18 weeks’ paid leave in line with the national minimum wage of about A$622 per week before tax.
HEALTH AND EDUCATION:
Both Abbott and Rudd have adopted Gillard’s policies of injecting A$9.8 billion in extra federal funding for schools over six years from 2014-15, and applying a new levy to collect A$20.4 billion by mid-2019 to fund improved care for the disabled.
BANKING AND PENSION FUNDS
Labor will gradually increase employers’ mandatory contributions to their employees’ pension or superannuation funds to 12 percent of their salary by 2019 from 9.25 percent.
The coalition has said it would delay by two years the increase in pension contributions by employers. It will also undertake a “root and branch” inquiry into Australia’s financial system.
Both Labor and the coalition would push for trade pacts with China and Japan and view the U.S. as a key ally. Abbott says the threshold for scrutinizing proposed overseas purchases of agricultural land should be set at A$15 million, down from the current A$244 million. Rudd is also calling for a more cautious approach to foreign ownership of rural land.