Bloomberg News

Gillard Tightens Labor’s Grip on Parliament as Speaker Quits

November 24, 2011

(Updates with comment from new speaker in seventh, eighth paragraphs; currency in 18th.)

Nov. 24 (Bloomberg) -- Australian Prime Minister Julia Gillard strengthened the Labor Party’s control of parliament as an opposition lawmaker defied his party and took the position of speaker of the legislature.

Peter Slipper, a member of the Liberal-National coalition, agreed to take the speaker’s post after the resignation of Labor’s Harry Jenkins today. Gillard’s minority government, which relies on the backing of three independents and a Greens Party member to pass legislation, effectively gains an extra vote in the lower house, while the opposition loses one because the speaker can’t cast a ballot.

The move on parliament’s last sitting day this year boosts momentum for Gillard, the nation’s first female prime minister, as she tries to reverse her government’s slide in opinion polls. It caps a three-week period in which she passed key legislation to make polluters pay for carbon emissions, cleared her mining tax bill through the lower house, announced a defense accord with the U.S. and overtook opposition leader Tony Abbott as preferred leader for the first time in six months.

“The government’s had a difficult year, they’re still behind in the polls,” said Nick Economou, a political analyst at Melbourne’s Monash University and co-author of “Media, Power and Politics in Australia.” “But I think there’s a sense that they are starting to turn it around.”

No Majority

Gillard formed a government last year after the nation’s closest election in seven decades ended Labor’s majority. She has had to rely on the support of the independent and Greens lawmakers to secure the 75 votes needed to pass legislation in the 150-member House of Representatives. Australia’s constitution allows the speaker to vote only if the lower house is tied.

Slipper’s election as speaker and Jenkins’ return to the backbenches means Gillard now has 76 votes in the lower house and the coalition 73, compared with the previous margin of 75 to 74.

Slipper, addressing the parliament for the first time since becoming speaker, said he would relinquish his party membership to underline his independence in the role.

‘Westminster Tradition’

“I will be an independent speaker in the Westminster tradition and I notice that on four occasions in September 2010 the leader of the opposition said that was his preference as far as a model for speakership is concerned,” Slipper said.

He was referring to a period when both parties were courting independents to form a minority government. His decision to leave the party pre-empted a likely move by Abbott to eject him.

Abbott said earlier today that Jenkins’ resignation as speaker underscored his argument that Gillard’s minority government is dysfunctional. He also warned opposition members against taking the role.

“The speaker has resigned so that the government can shore up its numbers in the parliament,” Abbott told reporters in Canberra. “Any of our members that might accept such a nomination would be henceforth excluded from our party room.”

A Newspoll survey this week showed Gillard’s rating as preferred prime minister rose to 40 percent from 39 percent two weeks earlier, her highest level since July. Support for Abbott as preferred leader slipped 5 points to 35 percent, his lowest standing in nine months, the poll of 1,143 people conducted Nov. 18-20 and published by the Australian newspaper showed. The survey had a margin of error of three percentage points.

Party Coup

Gillard, who ousted predecessor Kevin Rudd in a party coup in June 2010, has seen her poll ratings slump this year after she reneged on an election pledge not to introduce a carbon tax.

Parliament passed the carbon plan on Nov. 8 and this week the lower house backed her proposed 30 percent tax on coal and iron-ore profits.

The government is battling to meet its pledge to return the nation’s budget to surplus by 2012-13 as Europe’s debt crisis slows global growth and curbs Australian tax revenue.

“Lower global growth means slower growth in our region and slower growth” in Australia, Treasurer Wayne Swan said at the Asia-Pacific Economic Cooperation forum this month.

The Reserve Bank on Nov. 1 cut rates for the first time in 31 months, lowering the benchmark to 4.5 percent from a developed-world high of 4.75 percent, and on Nov. 4 cut its forecasts for growth and inflation for the next two years.

Local Currency

The local currency has declined 7 percent in the past month and fell below parity with the U.S. dollar last week as traders bet the central bank will need to lower borrowing costs again. It strengthened 0.5 percent today, the most in almost two weeks, and traded at 97.39 cents at 2:42 p.m. in Sydney.

Gillard’s government has also been under pressure among traditional Labor supporters over proposed laws to force gamblers to limit their losses on slot machines, known in Australia as poker machines. It agreed to introduce bills in order to secure the vote of independent lawmaker Andrew Wilkie.

Wilkie has said he would withdraw his support if Gillard didn’t implement the laws, which may force gamblers to pre-set limits on how much they are prepared to lose, or lower the maximum stakes on machines per bet to A$1. Passing such legislation could hurt Gillard in Labor strongholds such as western Sydney, where slot-machine gambling is a popular pastime.

The change in speakers and the resulting shift in voting numbers reduces the government’s reliance on Wilkie and loosens his grip on the legislative agenda.

‘Cut Wilkie Adrift’

“They’re going to cut Wilkie adrift,” said Economou of Monash University. “But this may also be part of a strategy to try and put a bit of distance between the Labor and the Greens.”

“The government is not so foolish to think that they could burn me because they know they may well need me again for any number of reasons,” Wilkie told reporters in Canberra today. “I believe the government is genuinely committed to honoring the agreement. As far as I’m concerned, nothing has changed, nothing at all.”

Rupert Murdoch’s Daily Telegraph, the best-selling daily newspaper in Australia’s largest city of Sydney, reported Nov. 3 that Rudd was being urged by colleagues to mount a leadership challenge against Gillard.

Gillard’s improved standing in the Newspoll survey followed her Nov. 16 announcement with President Barack Obama of an accord to deploy American Marines on Australian bases next year as the U.S. moves to counter China’s regional influence.

While the prime minister’s rating has improved, this week’s Newspoll showed Labor’s standing remains weak. Labor trailed the Liberal-National coalition, with support falling two points from a seven-month high to 30 percent. Support for the opposition rose 4 points to 48 percent, it said.

--With assistance from Jacob Greber and Edward Johnson in Sydney. Editors: Edward Johnson, Peter Hirschberg

To contact the reporters on this story: Michael Heath in Sydney at mheath1@bloomberg.net; Ben Sharples in Melbourne at bsharples@bloomberg.net

To contact the editors responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net; Stephanie Phang at sphang@bloomberg.net


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