Australians to go to the polls on Sept. 7

Associated Press
Australia's Prime Minister Kevin Rudd speaks during a press conference at the Parliament House in Canberra, Sunday, Aug. 4, 2013. Prime Minister Rudd called an election on Sept. 7 and said Sunday that it will be fought over who can be trusted to manage the Australian economy as it transitions from a decade-old mining boom fed by Chinese industrial demand that is now fading.(AP Photo/AAP, Lukas Coch) AUSTRALIA OUT
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Australia's Prime Minister Kevin Rudd speaks during a press conference at the Parliament House in Canberra, Sunday, Aug. 4, 2013. Prime Minister Rudd called an election on Sept. 7 and said Sunday that it will be fought over who can be trusted to manage the Australian economy as it transitions from a decade-old mining boom fed by Chinese industrial demand that is now fading.(AP Photo/AAP, Lukas Coch) AUSTRALIA OUT

CANBERRA, Australia (AP) — Prime Minister Kevin Rudd called an election for Sept. 7 and said Sunday that it will be fought over who can be trusted to manage the Australian economy as it transitions from a decade-old mining boom fed by Chinese industrial demand that is now fading.

In starting the five-week election campaign, Rudd said the economy can no longer rely on Chinese demand for iron ore and coal that made the country one of the few wealthy nations to avoid a recession during the global economic downturn.

"The boom, of course, has fuelled so much of our nation's wealth," he told reporters at Parliament House. "That boom is over."

"Who do the Australian people trust to best lead them through the new economic challenges that lie ahead?" he asked.

Rudd conceded that his center-left Labor Party was the underdog, saying his advisers had told him that if the election had been held this weekend, his government would have lost.

But opinion polls also show that more voters prefer Rudd, a 55-year-old Chinese-speaking former Beijing diplomat, as prime minister than opposition leader Tony Abbott, a former Roman Catholic seminarian and journalist who is also 55.

Latest economic figures show a sharp decline in the nation's finances, with the Treasury Department on Friday raising its estimated deficit for the current fiscal year to 30.1 billion Australian dollars ($26.8 billion) due to the mining slowdown. The new forecast for the year ending June 30, 2014, reveals a substantial deterioration in Australia's finances since May, when the department forecast a deficit of AU$18 billion.

The government also announced a AU$33.3 billion shortfall in the revenue forecast over the next four years — a deterioration of about AU$3 billion a week since the May forecast.

Economic growth for the fiscal year, forecast at 2.75 percent in May, was downgraded on Friday to 2.5 percent.

The unemployment rate forecast in May to rise to 5.75 percent in the current fiscal year was revised up to 6.25 percent. The latest figures show the Australian jobless rate crept from 5.6 percent in May to 5.7 percent in June.

The conservative Liberal Party-led opposition coalition has accused the government of wasting money on stimulus spending after the last conservative government delivered surplus budgets years after year until it lost power in 2007.

After the election was announced, Abbott promised to "get the budget back under control," and listed scrapping the unpopular carbon tax among his top priorities if elected.

The election promises to be an extraordinary contest for Australian politics. Labor leads Australia's first minority government since World War II, and polls suggest the opposition faces an easier task picking up seats than Labor does.

Labor holds 71 seats in the 150-seat House of Representatives where parties form governments. The opposition holds 72 seats, with the remainder held by independent lawmakers or sole legislators from minor parties.

A recent poll has shown that secrets spiller Julian Assange and his WikiLeaks Party have a realistic chance of winning seats in the 78-seat Senate.

Rudd was first elected prime minister in 2007 but was ousted in 2010 by his then deputy Julia Gillard in an internal leadership showdown among Labor lawmakers.

He reclaimed the leadership in a similar challenge on June 26 as the government faced the prospect of a loss of historic portions with Gillard at the helm.

Since then, Rudd has changed several key policy positions, and opinion polls suggest Labor is closing the opposition's lead.

Abbott opposes charging polluters for their carbon gas emissions, despite Australia having some of the world's worst emission rates on a per capita basis. He has vowed to give priority to scrapping both the carbon and mining taxes.

Both taxes were introduced by Labor in July 2012. The carbon tax on Australia's biggest polluters rose from AU$23 a metric ton of carbon dioxide to AU$24.15 from July 1, 2013. The opposition argues this is the world's highest tax rate on carbon dioxide and is making Australian industry uncompetitive.

The tax is due to be replaced in 2015 by an emissions trading scheme, in which the cost of emitting a metric ton of carbon would be determined by buyers and sellers in a carbon market.

Rudd has pledged to bring forward the emission trading scheme linked to the European market by a year to July 2014, reducing the cost to Australians of emitting a metric ton of carb dioxide from AU$25.40 to an estimated AU$6.

The 30 percent mining tax on the profits of iron ore and coal miners was designed to cash in on burgeoning profits from a mineral boom fueled by Chinese industrial demand. But the boom was cooling before the tax took effect, with prices for iron ore and coal peaking in 2011. The tax was initially forecast to earn the government AU$3 billion in its first year but collected only AU$126 million after six months.

The opposition has also promised to scale down the government's plan to build an AU$37.4 billion high-speed fiber-optic national broadband network. The government boasts it is the biggest infrastructure project in Australian history.

The opposition proposes a slower, AU$20 billion version that would incorporate the aging copper wire network rather than replace it.

The opposition would also introduce a new tax on big business to pay for a new maternity leave entitlement for middle and high income earners.

Mothers would be paid their usual salary of up to AU$150,000 while they take up to six months off work on maternity leave.

Mothers are currently entitled to the minimum wage of AU$622.10 a week for 18 weeks for maternity leave.

Both Labor and Liberal parties have promised to curb the number of asylum seekers reaching Australia by boat but propose different strategies to achieve this aim.

Labor has promised that every bona fide refugee who attempts to reach Australia by boat from July 19 will be settled on the impoverished South Pacific island nations of Papua New Guinea or Nauru.

The Liberals have promised new policies of turning asylum seeker boats back and creating temporary protection visas so that refugees can be sent back to their homelands when conditions improve.

Rudd said the September date meant he would not attend the G20 meeting in Russia that week, but Australia would likely be represented by Foreign Minister Bob Carr.

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