Australia`s Labor to scrape back into power

Last Updated: Wednesday, August 18, 2010 - 15:18

Canberra: Australian Prime Minister Julia Gillard`s Labor government will narrowly win Saturday`s election, a Reuters Poll Trend showed on Wednesday, paving the way for a controversial mining tax and a possible carbon trading scheme.

Australia`s small Greens party, on course to gain the balance of power in the Senate upper house, said it would seek to toughen the mining tax if Labor wins.

The proposed 30 percent tax on iron ore and coal, forecast to raise A$10.5 billion ($9.5 billion) over two years starting 2012, has been signed off by mining giants BHP Billiton, Rio Tinto and Xstrata, but is opposed by much of the rest of Australia`s key mining sector.

The Greens` stance could force the government to negotiate some changes. The Greens want to raise an extra A$2 billion a year, but party leader Bob Brown said they would not block the tax if it did not secure its changes.

"All I can do is say we will negotiate strongly, inject better ideas into the mining tax proposals Labor has, and I think we will get a dividend," Brown told the National Press Club.

"Given that option, you don`t have to be Einstein to know that the Greens will be going with the Labor Party alternative."

A Labor victory would also see a possible carbon trading scheme to combat climate change from 2012 and ensure construction of a $38 billion fiber-optic national broadband network.

The Liberal-National opposition opposes all three policies.
Close Election

With two days of campaigning left and economic management a key issue, the opposition on Wednesday promised a budget surplus of A$6.2 billion by 2012-13, almost double the government`s forecast surplus of A$3.5 billion.

Australians are historically wary of government borrowing due to high levels of personal debt and home ownership, so the opposition also promised to cut the country`s A$90 billion ($81.5 billion) debt by a third within four years.
"The coalition has the courage and commitment to draw a line in the sand and stop Labor`s reckless spending and waste," opposition treasury spokesman Joe Hockey said.

Bureau Report



First Published: Wednesday, August 18, 2010 - 15:18

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