Bloomberg News

Gillard Faces Eroding Popularity as Report Revives Rudd Tensions

February 14, 2012

Feb. 14 (Bloomberg) -- Prime Minister Julia Gillard faces a new hurdle to reviving her popularity after a documentary questioned her version of when she decided to challenge predecessor Kevin Rudd for leadership of the Labor Party.

The Australian Broadcasting Corp. program aired yesterday cited unidentified sources in the Labor Party as saying Gillard’s staff prepared a victory speech two weeks before she ousted Rudd in June 2010. Gillard, Australia’s first female leader, reiterated that she decided to seek party leadership the day she ousted Rudd, she said on ABC radio today.

“This revelation will cause a bit more erosion to her credibility,” said Rick Kuhn, a political analyst at the Australian National University in Canberra. “Gillard’s underlying problem is more her government’s fundamental policies, and even a shift to Rudd wouldn’t erase those.”

The documentary comes amid reports that Rudd plans to challenge Gillard for the leadership of the party as her public approval slips. Support for Gillard fell 3 percentage points to 37 percent, according to a Newspoll survey published today in the Australian newspaper, while backing for opposition leader Tony Abbott rose 3 points to 40 percent.

The survey of 1,141 people conducted Feb. 10-12 had a margin of error of plus or minus 3 percentage points. Gillard denied seeking her approval speech to be written ahead of her toppling Rudd in the documentary yesterday and again today on the ABC radio program.

‘Rudd’s Office’

“I didn’t direct the speech and the decision I made about seeking the Labor leadership was made on the day that I walked into Kevin Rudd’s office and discussed with him having a ballot for the leadership,” Gillard said on ABC radio. She declined to specify when she saw a draft of the speech.

A challenge from Rudd is possible by the end of March, the Australian newspaper reported Feb. 3 without citing anyone. On the same day, The Age newspaper said Gillard’s supporters in the party feared there had been a “seismic shift” against her towards Rudd, without naming its sources.

Gillard is also facing criticism from Abbott on her plan to introduce a carbon tax and her handling of the economy. The opposition Liberal National coalition leader has highlighted that last year the nation recorded its worst jobs growth in 19 years as a higher currency made manufacturers uncompetitive.

Lower Forecast

Australia’s central bank lowered its 2012 forecast for economic growth on Feb. 10, three days after keeping interest rates unchanged following consecutive reductions of 25 basis points in November and December. Toyota Motor Corp. and General Motors Co. have cut jobs in Australia this year, citing the currency’s strength, while Alcoa Inc. is reviewing the future of an aluminum smelter.

Gillard, 50, has forged agreements with the Greens party and independent lawmakers on proposed legislation such as a 30 percent tax on coal and iron-ore profits since she took office.

Senior government ministers have rallied around Gillard amid falling approval ratings, with Defense Minister Stephen Smith telling Sky News on Feb. 3 he was a “strong supporter.” Treasurer and deputy leader Wayne Swan and Manufacturing Minister Kim Carr have also backed Gillard.

Labor Party members moved to depose Rudd, 52, in June of 2010 as his public support fell amid a backlash from mining companies such as BHP Billiton Ltd. Rudd had proposed a 40 percent tax on resources profits.

--With assistance from Michael Heath in Sydney. Editor: Patrick Harrington, Nick Wadhams.

To contact the reporter on this story: Jason Scott in Perth at

To contact the editors responsible for this story: Edward Johnson at; Peter Hirschberg at

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