Australian PM surprises with September election call

Wed Jan 30, 2013 1:00am EST
 
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By James Grubel

CANBERRA (Reuters) - Australian Prime Minister Julia Gillard set national elections for September 14, stunning voters on Wednesday with eight months notice of the vote in a bold move designed to end political uncertainty surrounding her struggling minority government.

The election date means Gillard's government will serve a full three-year term, although analysts said the early notice meant she had started an eight-month campaign and lost her ability catch opposition leader Tony Abbott by surprise with a snap early poll.

"She's going for the strategy than an incumbent can wear out a fragile, or potentially fragile, opponent with a long campaign. The idea is for them to punch themselves out," analyst Paul Williams from Griffith University told Reuters.

"In this case, Tony Abbott and the opposition are so well entrenched it will backfire."

Opinion polls show Abbott's opposition Liberal-National party is well ahead of the government and Gillard would be swept from office, losing up to 18 seats, if an election were held now. The government could lose power if it loses just one seat.

The election will decide whether Australia keeps its controversial carbon tax, and a 30 percent tax on coal and iron ore mining profits, which Abbott has promised to scrap it if he wins power.

But apart from these two policy differences, the government and opposition differ little on domestic issues, and both firmly support greater involvement with China, the country's biggest trade partner, and close defense ties with the United States.

The financial markets were unmoved by the announcement. The Australian dollar remained firm, hitting its highest level against the Japanese yen in over four years. The share market reached a fresh 21-month high and government bonds were steady.   Continued...

 
Australian Prime Minister Julia Gillard speaks at the National Press Club in Canberra January 30, 2013. Gillard stunned voters on Wednesday by setting a national election for September 14, eight months away, in her first major political speech for 2013. Elections must be held in Australia by the end of the year, but Gillard said she wanted to end political uncertainty by setting the date now. REUTERS/Stringer