Rudd faces hard fight to stay in power

Australian Prime Minister Kevin Rudd. Photo / Greg Bowker

United States President Barak Obama raced over the horizon like the cavalry yesterday for Prime Minister Kevin Rudd as Australian politics rolled up its sleeves for an election this year in which the Government will be fighting much harder than it expected to keep office.

As Rudd and the Government both took big hits in the polls - with the Opposition overtaking Labor's primary vote - the White House announced that Obama would visit the country late next month as part of a trip that will also include Indonesia, where he spent part of his childhood.

An American presidential visit at any time is a welcome boost to an Australian Prime Minister whose voters still strongly support the alliance, allowing him to underwrite his international credentials, however briefly. In an election year it is a real bonus.

It is more so since the failure of December's Copenhagen climate change conference, which Rudd had hoped would cement his global stance, but which has instead rebounded to undermine popular support for the Government's proposed greenhouse emissions trading scheme.

It also helped eject ETS supporter Malcolm Turnbull from the Opposition leadership, installing right-wing conservative and climate change sceptic Tony Abbott in a job in which he is so far performing strongly.

Abbott is taking the Opposition along with him, and is capitalising on growing uncertainty among Australians on climate change and the effectiveness and cost of an ETS. The Government has reintroduced the ETS with the resumption of Parliament yesterday in what appears another doomed attempt to push it through a Senate that has rejected it twice.

In theory the Government now has a trigger for an early election, but the attraction of going to the polls on climate change is waning.

Abbott, who released the Opposition's new climate policy, is taking the fight directly to Rudd, using all of Question Time yesterday to attack the Government on the issue and trying to force the Prime Minister into a formal debate on what the Opposition calls Rudd's "great big new tax on everything".

Abbott's as-yet unfunded policy is a A$3.2 billion ($3.9 billion) package that includes a A$1 billion fund to provide incentives for industry and farmers to reduce emissions, the planting of 20 million trees and the storage of 85 million tonnes of carbon in the soil by 2020, and A$1000 rebates for household solar panels or hot water systems.

In a rowdy parliamentary session Rudd ridiculed the scheme, repeating Abbott's comment last year that climate change science was "crap", and accusing him of policy inconsistency that had seen him change his position "more times than he's changed his undies".

But Rudd has conceded to both his party room and journalists that a revitalised Opposition under Abbott is now a real threat.

"There are no guarantees in this business, absolutely none, and remember this will be a hard-fought election," he told ABC radio. "The political realities are these - if two or three people in a hundred change their vote, then Mr Abbott is Prime Minister."

A Newspoll in the Australian yesterday reported that the Opposition's primary vote had risen to 41 per cent, ahead of Labor's 40 per cent for the first time since the 2007 election. Labor's advantage in the two-party preferred vote that decides Australian elections has also been pruned from 10 points to four, leading the Opposition by 52 per cent to 48.

Although it is not uncommon for the polls to narrow in an election year, and Rudd can draw comfort from the fact that no Government has failed to win a second term in the past 60 years, it will be a tough campaign.

Rudd has won laurels for his management of the economy through the global financial crisis - the Reserve Bank yesterday surprised economists by deciding against a further rise in interest rates - but some of his major election promises have been stalled and Australians have been hit by rising costs and job losses.

Treasurer Wayne Swan also appears to be preparing the nation against a traditionally generous election-year Budget, emphasising the need for "extra fiscal discipline" and difficult decisions during Monday's release of the intergenerational looking ahead report.

"Government spending that seemed affordable during the period of largesse prior to the global crisis may not be affordable over the longer term," he said.

Rudd also has other real - and emotive - issues to face, including the flood of asylum seekers from Indonesia. Another 181 more people have arrived at the Christmas Island centre, where tents and demountable housing are being used to cope with rising numbers.

The Abbott plan

Overall target: To reduce emissions by 5 per cent by 2020, at $3.9 billion cost.

Big polluters: Would only be allowed to pollute a certain amount from July 2011. If they emit more, they would be fined. If they emit less, they would be rewarded by the Government.

Climate fund: A$1.1 billion annual fund would encourage farmers, businesses and households to cut emissions. It would go largely towards paying farmers to store carbon in the soil. It would pay for 20 million trees to be planted. The Government rebate for rooftop panels would be increased by A$1000.

- AAP