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Fragile Australian government battles discord on day one

Posted on: Thu September 09, 2010

SYDNEY  : Australia s newly elected Prime Minister Julia Gillard pledged to serve a full term after scraping back into power but her fragile coalition was immediately hit by discord over a new tax Wednesday. Welsh-born Gillard, who cobbled together a one-seat majority helped by three independents and a Greens MP after inconclusive polls, promised the nation s first minority government since World War II would be stable and effective .

 The government s aim is to go for its full term and deliver stable and effective government for three years, she told public broadcaster ABC. You should expect to see me lead, but in a different style than has been done before, understanding that it s not a question of dictating, but a question of consulting and inspiring, she added.

Gillard, who seized power in a June party coup, was handed a flimsy mandate on Tuesday when she won the backing of two kingmaker independent MPs, finally breaking a 17-day impasse after deadlocked elections. But less than 24 hours later, independent Tony Windsor was disappointed that a controversial new levy on the mining sector - which brought down Gillard s predecessor Kevin Rudd - would not be discussed at an upcoming tax summit.

 I thought it was going to be included in any discussions in relation to taxation, he told ABC radio. Treasurer Wayne Swan said the 30 percent tax would not be raised at the summit because legislation was already being prepared, and said he had smoothed over the issue with Windsor.

However, shadow treasurer Joe Hockey said the incident raised questions about the unity of the coalition, which will also face difficult negotiations over taking action against climate change. We re not going to have stability for the next three years if this is what happens on day one, Hockey said. The happy couple haven t even left the chapel and they re arguing about the mining tax already.

Gillard s Labour party was also torn by internal recriminations after its rebuke at the polls, and the prime minister faces an awkward challenge after promising to include ex-leader Kevin Rudd in her new cabinet. The red-headed industrial lawyer became Australia s first woman leader by ousting Rudd on June 24 and called polls three weeks later, banking on a wave of support and goodwill over the strong, resource-led economy.

But the anticipated honeymoon period failed to materialise as many voters turned away from the two main parties and handed the environment-focused Greens a record ballot share. Analysts said the minority government was a difficult arrangement but workable as all involved were keen to preserve stability.

 It s delicate but I think it s workable. The considerable common policy ground between them is capable of being maximised, said Andrew Scott, a political scientist from the Royal Melbourne Institute of Technology. Meanwhile newspapers accused Gillard of bribing her way back into power by promising the independents 9.0 billion US dollars for rural healthcare.

 The Big Steal, said Sydney s Daily Telegraph, while the business-friendly Australian Financial Review s headline simply read: Gillard buys power for 10 billion dollars . Australians should be concerned at the outcome of the election, the Review s editorial said.

 It is no recipe for the unpopular reforms that are needed to revive productivity and keep Australia competitive in an increasingly challenging world. Share prices closed 0.79 percent lower with major miners BHP Billiton and Rio Tinto down 1.38 and 1.22 percent respectively, while the Australian dollar was little changed at 91.40 US cents. US President Barack Obama offered Gillard his congratulations along with British Prime Minister David Cameron and New Zealand leader John Key, who also head minority governments.

Courtesy : Business Recorder