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Australian election 2010

Standard Note: SN/IA/5673 Last updated: 10 August 2010

Author: Ben Smith Section International Affairs and Defence Section

A general election has been called for 21 August 2010. This note gives background, and looks at the fall of and the campaign.

Contents

1 Recent political milestones 2

2 Rudd Government 2

3 and the forthcoming election 4

4 Outgoing Parliament 5 4.1 House of Representatives 5 4.2 Senate 5

5 Labor platform 5

6 platform. 6

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1 Recent political milestones 1972: Labor forms first government since 1949, under

1975: Constitutional crisis as Labor government is dismissed by the Governor General and a conservative caretaker administration under , of the .

1983-1993: Labor governments under

1986: Legal system is made independent of the UK, with the ultimate appeal to the Privy Council no longer applying.

1993: Labor government of declares its intention to pursue republic status.

1996: Keating is defeated by conservative coalition under of the Liberal Party

1998: Howard wins another general election. A constitutional convention recommends installing a president chosen by parliament as head of state.

1999: A referendum votes to keep the Queen by 55%. Australian troops heavily involved in the international effort to protect East Timor’s move to independence, reflecting Australia’s growing role as a regional ‘policeman’.

2000: Sydney Olympics

2001: Howard wins a third term. Pursues controversial immigration and asylum policies

2002: Bali bombing- 88 Australians die

2003: Australia deploys troops to the Gulf, in preparation for the Iraq war. Senate passes a vote of no confidence in Howard over Iraq

2004: Parliamentary committee clears the government of manipulating Iraq WMD intelligence. Howard wins fourth term as Prime Minister

2007: Labor Party under Kevin Rudd defeats Howard in a landslide.

2010: Julia Gillard becomes Prime Minister in place of Rudd1

2 Rudd Government Kevin Rudd only became the leader of the Labor Party in 2006. His first year was very successful, maintaining the highest poll rating for any new Prime Minister,2 but soon afterwards, as his flagship climate change policies hit difficulties, his popularity began to wane. His battle with the mining companies over the resource tax (see below) made him look inflexible and was poorly communicated. Having concluded that he lacked sufficient backing among MPs, he called a leadership ballot on 23 June, and In June 2010, he was ousted by his deputy, Julia Gillard.

1 Chronology based on: Australia timeline, BBC News Online, 24 June 2010 2 “Rudd celebrates successful year”, Financial Times, 25 November 2008

2 Climate change

In 2007, he ratified the Kyoto Protocol, reversing one of the previous government’s controversial policies and declaring climate change "the greatest moral and economic challenge of our age".3 In December 2008, he announced plans to cut Australian carbon dioxide emissions by 15% from 2000 levels by 2020. In 2009, Rudd tightened the reduction target for CO2 emissions from 15% to 20% but delayed the implementation of the proposed emission trading scheme to 2011, to allow industry more time to adapt.4 In December 2009, the emissions trading scheme was blocked for the second time in the Senate, when the Liberal Party changed its leader and its policy. The government postponed the introduction until 2013 at the earliest, leading to a slump in the polls for the Labor Party.

The economy

In February 2009, Rudd launched a second fiscal stimulus package worth £18.8 billion, but faced a senate battle, where Labor has no majority. The measures were defeated and had to be re-introduced to the House of Representatives, but eventually passed. In 2009, the Government announced that it would spend some £16 billion on creating a national broadband network and also promised to invest heavily in solar and other renewable energy sources. Australia had a ‘good’ crisis, coming out of the downturn quickly and was the first country to raise base rates in October 2008. Figures for house prices for the first quarter of 2010 showed a rise of 20% over the same period last year. GDP grew throughout the crisis, the worst result being 2009, with growth of 1.3%. The economy is forecast to grow by 3% and 3.5% in 2010 and 2011 respectively.5

Foreign policy

Kevin Rudd came to power speaking Mandarin and aiming to strengthen Australia’s Asia- leaning foreign policy, with a new focus on China. The two countries were already becoming economically interdependent through China’s demand for Australian primary resources. Australia is a member of the Asia Pacific Economic Cooperation forum, and aims to conclude free trade agreements with China and the Association of Southeast Asian Nations. Political problems with Australia’s relationship with China began to emerge in 2009, as Canberra blocked the takeover of Oz Minerals by China’s state-owned Minmetals. Other Sino- Australian deals, like the £13 billion investment by Chinalco in Rio Tinto - the biggest proposed overseas investment ever by a Chinese group - remained under review. Concerns about economic sovereignty and national security were raised by opposition politicians and a wave of anti-Chinese rhetoric swept the country, especially when details emerged of a secret meeting between a high-ranking Politburo member and the Prime Minister. Rudd’s popularity was unaffected by the controversy.6 The Rio/Chinalco deal was dropped without Australia having to make an official decision on it. In July 2009, four Rio executives in China were arrested by the Chinese authorities for alleged spying, as a dispute over iron ore prices continued. In November 2009, Rudd made overtures to India.

3 “Australian PM calls leadership ballot amidst slump in popularity”, Independent, 24 June 2010 4 “Australia joins solar power plant race”, Financial Times, 19 may 2010 5 IMF, World Economic Outlook Country and Regional Perspectives, April 2010 6 “Rudd's pro-Beijing stance emerges as a liability”, Financial Times, 21 April 2010

3 Immigration

Rudd initially softened the ’s asylum policies, ending the requirement for asylum-seekers to remain in detention while their cases were decided. Later, however, he appeared to do a U-turn, suspending the processing of applications by asylum-seekers from Sri Lanka and Afghanistan.

The resource tax

In May 2010, Kevin Rudd proposed a super tax of 40% on profits in the mining industry, to address rising health care and pension costs. The move was strongly opposed by the industry, which was angered at the Government’s failure to consult them. Kevin Rudd’s credibility was particularly knocked by the revelation that the government had spent large amounts on an advertising campaign on the tax, having effectively banned tax-funded advertising two years earlier. Commentators say that the mining tax inflicted terminal damage on Rudd’s premiership and made Labor Party power brokers fear that they would lose the forthcoming election under his leadership.

3 Julia Gillard and the forthcoming election Having served for two years as Kevin Rudd’s deputy, Julia Gillard became the first woman Prime Minister of Australia on 24 June 2010. On entering office, Ms Gillard moderated Rudd’s resources tax policy, reducing the scope of the tax, and the rate to 30%, and secured agreement for it. The resolution of the crisis appeared briefly to be halting Labor’s slide in the opinion polls, but the decline resumed in July. Fallout from Gillard’s removal of Rudd caused disapproval among voters and included leaks from within the party, attributed by some to the Rudd camp, which damaged Gillard’s image. The British parliamentarian Alan Milburn has reportedly flown to Australia to advise Gillard on the election, having also been friends with Kevin Rudd.7

Some polls in August suggested that Labor was level with or even behind the Liberal-led opposition, threatening Labor with presiding over the first Australian government not to win a second term since 1931.8 Support has fallen particularly in Rudd’s home state of , a mining state with many marginal seats, where a poll put Labor 12 points behind the opposition.9 On 6 August, Rudd publicly backed the Gillard campaign and is rumoured to want a cabinet seat should she win. The latest poll shows Labor moving slightly ahead, at 52% and the Coalition at 48%.10

House of Representatives dissolved on 19 July 2010 and a general election for the House of Representatives and half of the Senate will be held on Saturday, 21 August 2010. Voting in Australia is compulsory and the country uses an alternative vote system for general elections: voters number the candidates in the order of their preference and the votes are distributed if no candidate has an absolute majority. A similar system is proposed for the UK.

7 “Alan Milburn, the former...”, Times, 7 August 2010 8 “Australian rules; In-fighting has hurt Labor, but not yet cost it the election”, Financial Times, 5 August 2010 9 “'Julia' tries to win back voters who know her evil twin, the backstabber”, Times, 7 August 2010 10 , 8 August 2010

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4 Outgoing Parliament 4.1 House of Representatives Party representation in the House of Representatives- 42nd Parliament

Party Members

Australian Labor Party 83 Independent 3 Liberal Party of Australia 55 National Party of Australia 9

Total 150

Source: Australian Parliament, Party Representation in the House of Representatives

4.2 Senate State and Party representation in the Senate

State or Territory Greens Labor Family First Ind Liberal National/ TOTAL Country Liberal

Australian Capital Territory .. 1 .. 1 .. 2 New South Wales .. 6 .. 4 2 12 Northern Territory .. 1 .. .. 1 2 Queensland .. 5 .. 5 2 12 1 5 .. 1 5 .. 12 Tasmania 2 5 .. 5 .. 12 Victoria .. 5 1 6 .. 12 Western Australia 2 4 .. 6 .. 12

Total 5 32 1 1 32 5 76

Source: Australian Parliament, State and party representation in the Senate

5 Labor platform Leader: Julia Gillard

5 Treasurer and Deputy Prime Minister:

Foreign Minister: Stephen Smith11

Labor policies:

• to introduce a National Health and Hospitals Network, involving $7.3 billion in investments over the next five years

• 30 per cent Minerals Resource Rent Tax which will apply to iron ore and coal projects

• increase the superannuation guarantee to 12 per cent and extend the superannuation guarantee to cover older workers up to age 75

• introduce tough new emissions standards for all new coal-fired power stations

• invest $200 million to help build up to 15,000 more affordable homes in regional cities over three years

• students from years 9 to 12 will be offered a new National Trade Cadetship as an option under the National Curriculum.12

6 Coalition platform Leader:

Shadow Treasurer:

Shadow Minister for Foreign Affairs: Julie Bishop13

Coalition policies:

• Restore the budget surplus within three years and start paying Labor’s debt

• End Labor’s waste and restore cabinet government

• Reject Labor’s massive new mining taxes and other taxes that hurt productivity

• End discrimination against small businesses

• Enforce strict border security and control

• Link population growth to the provision of better infrastructure

• Take direct action on water and the environment

• Protect private health and improve the public health and hospital system

• Six months’ paid parental leave

• Safer neighbourhoods; Raise standards in education

11 Australian Labor, Ministers [accessed 10 August 2010] 12 Australian Labor, Agenda [accessed 10 August 2010] 13 Liberal Party of Australia, Candidates [accessed 10 August 2010]

6 • Restore work-for-the-dole and mutual obligation14

14 Liberal Party of Australia, Coalition action contract [accessed 10 August 2010]

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