Bloomberg News

Australia’s Gillard Has Support of Labor Caucus, Swan Says

February 05, 2012

(Updates with meeting with lawmakers in second paragraph.)

Feb. 5 (Bloomberg) -- Australian Prime Minister Julia Gillard has the backing of her Labor Party caucus, said Treasurer Wayne Swan, responding to speculation that Foreign Minister Kevin Rudd will make a leadership challenge.

“Our prime minister has the strong support of our caucus,” Swan said on Australian Broadcasting Corp. television today. “She is someone who is getting things done.”

Gillard met with party lawmakers in Canberra today amid media reports about Rudd’s leadership tilt, which intensified after a Jan. 28-29 Newspoll survey showed Labor’s primary vote fell one percentage point to 30 percent, behind the Liberal- National coalition’s 45 percent.

Gillard, Australia’s first female prime minister, formed a government after the nation’s closest election in seven decades in September 2010, three months after replacing Rudd as leader in a late-night party coup. Her parliamentary majority was reduced to one seat last month when an independent lawmaker withdrew his support, saying she’d broken a pledge to tighten gambling laws.

Rudd, who is attending a security conference in Germany and wasn’t at the Canberra meeting, said earlier this week he was happy with his role as foreign minister, according to The Australian. The next general election will be held in 2013.

Swan and senior members of the ruling Labor government including Defense Minister Stephen Smith and Kim Carr, manufacturing minister, have publicly backed Gillard to remain as leader.

Planning Session

The meeting in Canberra was a planning session for the party ahead of Parliament’s first sitting for the year next week, Gillard told 2CC radio on Feb. 3.

“We want to run a very competent, stable, methodical government, so it just makes sense to bring the team together at the start of the Parliamentary year and talk about the year to come,” Gillard said. “I don’t worry about chatter in the media, I get on with the job.”

Several ministers would leave their posts if Rudd retook the leadership, the Sydney Morning Herald reported yesterday, without naming them. Independent lawmaker Rob Oakeshott, who helped Labor form a minority government in 2010, won’t guarantee his support for the party if there is a leadership change, the Herald reported.

Gillard’s lead as preferred prime minister in the latest Newspoll fell 3 percentage points to 40 percent, compared with Liberal-National opposition leader Tony Abbott’s 37 percent. The survey had a margin of error of plus or minus 3 percentage points.

Economic Record

Abbott criticized Gillard this week for her handling of the economy. In 2011, her first full year as prime minister, the nation recorded its worst job growth in 19 years and house prices slumped by a record 4.8 percent.

Labor lawmakers will focus on policies that help businesses, including those affected by the nation’s high dollar, Swan said today. The government is committed to returning its budget to surplus in 2012-13, which will require fiscal discipline, he said.

Swan also criticized Australia’s banks for signaling they may not pass on in full any cuts to the Reserve Bank of Australia’s benchmark rate.

“What they are saying is that they should have a right, irrespective of any particular market condition, to maintain forever huge profitability,” Swan said.

“There’s a lot of other businesses out there that would look at that sort of approach of the banks and they’d be pretty puzzled, because the marketplace isn’t working like that for them.”

--Editor: Paul Tighe, Jim McDonald

To contact the reporter on this story: Sarah McDonald in Sydney at smcdonald23@bloomberg.net.

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net


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