Canberra: Australia appointed its first woman prime minister Julia Gillard on Thursday, who vowed to end division over a controversial mining tax, resurrect a carbon trade scheme and call elections within months.
Former prime minister Kevin Rudd made an emotional and ignominious exit, quitting just before the Labor party was to set dump him in a leadership ballot.
The Rudd government`s dramatic slide in support this year sparked fears within the ruling party of an electoral defeat at a poll expected around October.
"I asked my colleagues to make a leadership change because I believed that a good government was losing its way," Gillard told a news conference.
Centrebet bookmaker made a Gillard Labor government outright favourite to win the next election, expected around October.
Gillard, 48, immediately offered to end a bitter dispute over a controversial "super profits" mining tax, which is threatening USD 20 billion worth of investment and has unnerved voters, saying she would throw open the door for fresh negotiations.
But she stressed miners should pay more tax.
"To reach a consensus we need to do more than consult, we need to negotiate. We must end this uncertainty which is not good for this nation," she said, adding the government would end its mine tax advertisements and called on miners to withdraw their multi-million dollar ad campaign which was worrying voters.
The Australian dollar briefly jumped after the leadership change, while shares in BHP Billiton, the world`s biggest miner, and Rio Tinto rose 2 percent, on hopes of a mining tax compromise, before coming off their best.
Gillard`s takeover would see the government resurrect its failed climate change policy, a carbon trade emissions scheme, with the new prime minister saying she was disappointed in the government`s failure to pass laws to set a price on carbon.
"If elected as prime minister I will re-prosecute the case for a carbon price at home and abroad. I will do that as global economic conditions improve and our economy continues to strengthen," she said.
Rudd became the shortest-serving Australian prime minister since 1972, with his leadership falling apart after a string of poor opinion polls showed him losing ground over recent decisions to shelve a carbon-reduction scheme and impose a new mining tax.
"I have given my absolute all. I was elected by the Australian people as the prime minister ... to bring back a fair go for all Australians," said Rudd, choking back tears.
Government lawmakers believe Gillard has a better chance of winning back voters ahead of elections because she is a warmer personality who can sell policies more effectively.
Gillard will automatically attract a large female vote, especially when compared with conservative opposition leader Tony Abbott, who is anti-abortion and opposes sex before marriage.
A recent opinion poll showed, female voters would ditch Abbott for Gillard, favouring the female leader by a commanding 53 percent to 23 percent for Abbott.
Gillard quickly sought to establish her differences with Rudd by pledging a more consultative leadership and action to resolve such vote-shredding issues as the mining tax and climate change.
Miners expect tax softening
Global miners such as Rio Tinto, BHP and Xstrata are expected to campaign strongly against the tax, if it is not changed, at the next election and help a resurgent conservative opposition`s bid to oust Labor.
"If she is going back to a clean slate that`s good news. But we still do not know if she will be negotiable on the 40 percent and other details. For us, the devil is in the detail," said Simon Bennison, chief executive of Australia`s Association of Mining and Exploration Companies.
Economic analysts believe Gillard will either water down the tax or offer major concessions to miners.
"If they`ve gone to the trouble to put a new leader in to get their re-election chances up, then obviously they`re going to water down the mining tax as well -- all part of that strategy to shore up voter support," said Mark Taylor, senior resources analyst at Morningstar.
Taylor suggested a Gillard government may "do something fairly radical" and put the tax on the backburner or make large concessions on the uplift rate or headline rate in order to appease miners and woo back voters.
A Gillard government could be expected to take a different approach to Rudd on other election issues, such as climate change and asylum seekers, which have caused Labor`s slump with voters.
Rudd`s failure to have a hostile Senate pass his climate policy and postpone the carbon trading scheme until 2011 lost the government the Green vote which brought it to power in 2007.
The influential Greens party, which may be a kingmaker in the next Parliament with seven Senators, said Gillard is an excellent negotiator, which bodes well for future climate bills.
"I call on new prime minister Gillard and the leader of the opposition to stop the energy policy warfare and to seek consensus on this issue," said Independent MP Rob Oakeshott.
Rudd`s unsuccessful steps to stop boatpeople has angered both voters opposed to asylum seekers and voters demanding a more humanitarian policy, with asylum seekers currently held in detention camps on an offshore island and an outback town.
But on the issue of asylum seekers, Gillard is reportedly under Labor party pressure to shift from her left-wing position and take a tougher stand on boatpeople.