Bloomberg News

Rudd Calls Sept. 7 Vote in Australia Showdown With Abbott (2)

August 04, 2013

Australian Prime Minister Kevin Rudd

Australian Prime Minister Kevin Rudd says he is best placed to steer the country through an economic downturn. Photographer: Mark Graham/Bloomberg

Prime Minister Kevin Rudd called Australia’s election for Sept. 7, as the reinstated Labor leader seeks to overcome his party’s tarnished brand to beat Tony Abbott’s opposition.

Rudd, 55, will need to convince voters that a second term will be more successful than his first, which ended in a party coup engineered by colleagues disgruntled with his autocratic style. Abbott, 55, who trails as preferred prime minister even as his coalition holds a slim lead in opinion polls, faces the challenge of transforming his negative image into that of a leader with a policy platform for the nation.

“Voters will be looking to see if these men can overcome their flaws,” said Andrew Hughes, who conducts political-marketing research at the Australian National University in Canberra. “Rudd will want to show he can delegate to his team and rule in an organized, efficient way, while Abbott needs to display that he’s more than just an aggressive opposition leader.”

Rudd and Abbott’s ability to woo voters with traditional campaign spending promises will be hampered by dwindling government revenue and slowing economic growth that prompted Treasury last week to forecast the budget deficit will blow out to A$30.1 billion ($26.8 billion) this fiscal year. Economic management will be a centerpiece of the five-week campaign, as both seek to convince voters they are best-qualified to steer the world’s 12th-largest economy through a downturn as the China-led mining boom wanes.

‘Economic Challenges’

The election will be about who voters “trust to best lead them through the difficult new economic challenges that now lie ahead,” Rudd, who returned to the top job on June 26 after defeating Julia Gillard in a leadership ballot, said yesterday. “With the end of the China resources boom, we can no longer afford to have all our eggs just in one basket.”

Since Rudd regained the leadership, his party has narrowed the gap in opinion polls to Abbott’s Liberal-National coalition. Labor trailed the opposition by four percentage points on a two-party preferred basis in a Newspoll published today, compared with a 14-point deficit under Gillard. The two-party preferred measure is designed to gauge which party is most likely to form government under Australia’s preferential voting system.

Rudd’s Ratings

On the question of preferred prime minister, Rudd led Abbott by 14 points. Rudd’s personal support dropped into negative territory for the first time since he regained the leadership, with voter satisfaction declining four points to 38 percent and dissatisfaction rising six points to 47 percent, the poll showed.

Newspoll is 50 percent owned by News Corp. Australia and 50 percent by Millward Brown Inc., a market-research company

Rudd told reporters yesterday in Canberra he’s the “underdog” in an election race that he said would be dominated by negative, personal attacks from the opposition.

The script for any negative campaigning by Abbott could be written by Rudd’s own Labor colleagues, some of whom criticized what they labeled as the chaotic and dysfunctional style of his first stint as prime minister from 2007 to 2010.

When Rudd launched an unsuccessful leadership challenge of Gillard in February 2012, then-Treasurer Wayne Swan described him as a man of “great weakness” who had demeaned his party colleagues, while then-Attorney-General Nicola Roxon said she witnessed him displaying “quite a lot of very bad behavior to staff and to officials.”

Abbott’s advertising campaign will have “plenty of material,” said Nick Economou, a political analyst at Monash University in Melbourne. “All they have to do is re-run all the vile things his colleagues said about him last year.”

Lessons Learned

Rudd has said he’s learned lessons since Gillard ousted him in a June 2010 party room coup, and told reporters yesterday the “Australian people know me pretty well, warts and all.”

The Labor government has been “wracked by division and dysfunction” and promises “more of the same if it’s re-elected,” Abbott told reporters yesterday.

“The choice couldn’t be clearer,” Abbott said. “The choice is between the positive plans of the coalition and more of the same under the Australian Labor Party.”

Rudd leads a minority government, formed by Gillard in 2010 after the closest election in seven decades, that has relied on independents and the Greens to pass laws. Labor holds 71 of the 150 seats in the lower house -- where government is formed. Abbott’s coalition has 72 seats, with seven held by independents or smaller parties.

Senate Race

Half the 76 Senate seats will also be up for grabs. The coalition has 34 upper house seats, Labor 31 and Greens or others 11.

Along with claims he leads a party riven by internal divisions after three leadership challenges in as many years, Rudd will have to rebut opposition attacks on Labor’s economic stewardship.

The government on Aug. 2 projected a revenue shortfall of A$33.3 billion over the next four years, from its last forecasts 2 1/2 months ago. Treasurer Chris Bowen cut the economic growth estimate this fiscal year to 2.5 percent from 2.75 percent seen May 14 and said unemployment will rise to a more than decade-high 6.25 percent.

Treasury in May forecast a budget deficit of A$18 billion for the year to June 30, 2014.

The Australian dollar declined 0.1 percent to 88.94 U.S. cents as of 10:14 a.m. in Sydney. The benchmark S&P/ASX 200 Index fell 0.1 percent to 5,110.3.

Jobs, Growth

Labor is trying to frame the election as a battle between David Cameron-style austerity from the opposition and its own program that allows the deficit to widen as it prioritizes jobs and growth.

In preparing for the ballot, Rudd has sought to neutralize policy issues that dogged Gillard’s three-year term and saw Labor in danger of an electoral wipeout. He’s toughened Labor’s stance against a rising number of asylum seekers arriving by boat, and started sending them to Papua New Guinea.

Rudd has also pledged to legislate to change Gillard’s climate change strategy that left Australia with the world’s highest carbon price. Currently set at A$25.40 a ton for 2014-15, the price will move on July 1 next year to a floating price of about A$6 if Labor wins the poll and can get legislation passed by parliament.

The prime minister, who said Aug. 3 he wanted to attend the Group of 20 summit in Russia on Sept. 5-6, said yesterday Foreign Minister Bob Carr would go in his place.

Country Boy

Rudd, who yesterday painted himself as a country boy who overcame humble beginnings to become prime minister, says he is best placed to steer Australia through an economic downturn.

As employers including Ford Motor Co. (F:US) cut jobs, and the central bank says growth is likely to remain below trend in the near term, Rudd has ditched the optimism of Gillard to acknowledge the economy faces profound challenges -- putting him more in tune with voters.

In his first term as leader the fluent Chinese speaker guided Australia’s economy through the global financial crisis, boosting spending on schools and roads and distributing more than A$20 billion in cash to households.

Carbon Trading

Support for Rudd dissipated after he shelved his plan for a carbon-trading system and proposed a 40 percent tax on “super profits” of resource projects in Australia. In the run-up to his ouster, dissatisfaction with the former diplomat climbed to 55 percent, an Australian newspaper poll showed in June 2010.

While Abbott has vowed to ax Labor’s emissions trading plan and mining profits tax, to “stop the boats” and find ways to open up the nation’s remote northern regions to agriculture, he is yet to spell out a more detailed economic and social blueprint.

As opposition leader the Rhodes scholar, former journalist and one-time boxer took advantage of policy missteps by Australia’s first female leader, and was credited with the coalition’s lead in opinion polls during Gillard’s tenure. The former trainee priest, who later married and raised three daughters, has denied Gillard’s claim that he was guilty of sexism and misogyny in his attacks on her leadership.

“Rudd is coming from a long way back and it will take a monumental effort from here to win because the Labor brand is so damaged,” said Norman Abjorensen, a political analyst at the Australian National University. “Abbott’s street-fighter image worked to his advantage for a long while but there are signs that since Rudd’s return, he hasn’t seemed able to change gear.”

To contact the reporter on this story: Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net


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