Australian PM Gillard wins leadership challenge

Julia Gillard now faces a mammoth task to rebuild support for her divided and unpopular minority government.

Canberra: Australian Prime Minister Julia Gillard won a leadership showdown with party rival Kevin Rudd with strong backing from her party on Monday, but now faces a mammoth task to rebuild support for her divided and unpopular minority government.

Gillard won the ballot of ruling-party lawmakers, 71 votes to 31, in a convincing victory, ending Rudd`s hopes of returning as prime minister any time before the next election, due in late 2013.

Rudd`s supporters earlier put Gillard on notice that whatever the leadership result, she must lift the government`s standing in opinion polls or she could still be dumped as prime minister before the next election.

"I formally declare Julia Gillard re-elected as leader of the Australian Labor Party," a spokesman for the ruling party, Chris Hayes, told reporters after what he described as an intense meeting of Labor lawmakers at Parliament house.

Former Labor Party leader Mark Latham said the vote was an overwhelming vote of support for Gillard, and Rudd would be unable to mount a second challenge on the back of the result.

"There`s no way Rudd, on those numbers, can come back to the leadership," Latham told Sky television, adding that any further challenge against Gillard would now require a third candidate, possibly Defence Minister Stephen Smith or Workplace Relations Minister Bill Shorten.

The leadership vote has exposed deep divisions within the unpopular government, which opinion polls show would lose an election by a landslide.

A Newspoll on Monday showed Labor`s primary support had risen to a 12-month high despite the leadership turmoil, with two-party support for the government up two points to 47 percent compared with 53 percent for the opposition, down two points.

Rudd was preferred to Gillard as prime minister by 53 percent to 34 percent.
Gillard had called for the leadership vote to stamp her authority over the governing Labor Party after Rudd suddenly quit as foreign minister in Washington last week after weeks of mounting infighting between the two camps.

The two have had a strained relationship since Gillard engineered a party coup to replace Rudd as prime minister in June 2010.

While Rudd did not have the support of his parliamentary colleagues, he has consistently polled above Gillard as preferred prime minister, and has said he was the only leader capable of turning around the government`s poor polling.

Before the vote, Rudd said he would return to the government backbench and would not challenge Gillard a second time before the next election.
"I can`t be more explicit than to say I would not initiate a further challenge against Julia," he told Australian television.

Financial markets have largely ignored the leadership fight, given only minor policy differences between Gillard and Rudd. Both are committed to return to a small budget surplus by mid 2013.

Bureau Report