LABOR WINS MANDATE FOR CHANGE IN AUSTRALIAN

C O N F I D E N T I A L SECTION 01 OF 02 CANBERRA 001678

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SIPDIS

E.O. 12958: DECL: 11/25/2017
TAGS: PGOV PREL AS
SUBJECT: LABOR WINS MANDATE FOR CHANGE IN AUSTRALIAN
ELECTION

REF: A) CANBERRA 1671 B) CANBERRA 1462

CANBERRA 00001678 001.2 OF 002


Classified By: James F. Cole for reasons 1.4 (b) and (d).


1. (C/NF) SUMMARY: With the polls consistently favoring
Australian Labor Party (ALP) leader Kevin Rudd over Prime
Minister John Howard's Liberal-National Party Coalition since
last December, it was no surprise that the ALP won the
November 24 federal parliamentary election (ref A). The
overall national vote swing in favor of the ALP was 6.08
percent, giving them at least 23 more seats and a total of 83
in the 150-seat parliament. With seven seats still undecided
as of Monday, November 26, analysts believe the ALP's seat
total could ultimately reach 86-88, or a majority of 10-12
seats. The Coalition will retain its control of the Senate
until July, however, after which neither party will have a
majority and the Green Party will become the swing party in
the Parliament's upper house.


2. (C/NF) Beyond the predictable switch to Labor, there were
three unexpected results: Prime Minister John Howard lost
his seat in Sydney; the swing to the ALP in Queensland,
Rudd's home state, was a huge 8.3 percent and delivered at
least nine seats to Labor; and the Liberal Party lost more
seats than it expected to in the state of Victoria. In
another surprise the day after the election, Peter Costello,
outgoing Treasurer and heir-apparent to the leadership of the
Liberal Party, announced he would not be a candidate for
party leader (septel). Ex-Environment Minister Malcolm
Turnbull, who performed strongly in his marginal seat on a
day the tide was running against his party, and ex-Health
Minister Tony Abbott have announced they are candidates for
Opposition Leader. Also on Sunday, Rudd said new government
ministers would be chosen on Thursday, November 29. The
swearing in will occur the next day or early the following
week. END SUMMARY

RUDD WINS WITH A LARGER VOTE SWING THAN HOWARD'S IN 1996


3. (U) Although the polls had given Kevin Rudd a steady 8-10
point lead over PM Howard since he became ALP leader last
December, most political observers expected the difference to
narrow before the election. In the end, the overall margin
of victory was 6.08 percent, higher than the 5.1 swing won by
Mr. Howard in 1996, but much less than the polls predicted.
If the vote swing had been uniform, the ALP should have
picked up 23 seats. With the higher swing in Queensland,
however, the total seat gain for Labor is likely to be
greater. Given that the ALP already held most of the seats
in Victoria, local pundits believed it would be difficult for
Labor to pick up seats from popular, experienced Liberal
Party incumbents. On the day, however, the 5.8 percent swing
in Victoria delivered three and possibly four seats to the
ALP, one more than the three that would have fallen with a
uniform swing. Seven seats are currently too close to call
but with six of those being Liberal seats, the ALP's total is
likely to surpass 85.

AMONG LIBERAL RISING STARS BROUGH FALLS BUT TURNBULL SURVIVES


4. (SBU) Four, and possibly five Liberal Party ministers lost
their seats Saturday night. Prime Minister John Howard was
the highest profile casualty for the Liberal Party. His seat
of Bennelong had become more marginal with a redistricting
after 2004 that had added areas with more traditional Labor
voters. With a photogenic high-profile opponent in Maxine
Qvoters. With a photogenic high-profile opponent in Maxine
McKew and a strong swing to Labor in New South Wales (NSW),
Howard could not resist the tide of change, although the
final result was 51-48 percent. Perhaps more damaging for
the Liberal Party was the loss by Indigenous Affairs Minister
Mal Brough in the outer-Brisbane seat of Longman. Brough, a
young, rising star within the Queensland Liberal Party, had
gained national attention with the Government's intervention
in the indigenous community in the Northern Territories. As
popular as he was, however, he held a seat with a volatile
electorate that was sensitive to interest rate increases and
open to the higher cost-of-living arguments of the Labor
Party. He could not survive the big swing in favor of
Queensland native son Kevin Rudd and lost his seat.
Recognizing his charisma, the Liberal Party had wanted to put
him in a safer seat before the election and now the
disappointed Brough is talking about leaving politics.


5. (SBU) Environment Minister Malcolm Turnbull bucked a 6.52
swing against the Liberal Party in NSW to retain his seat in

CANBERRA 00001678 002.2 OF 002


Sydney by 53.4 to 46.6 percent. A popular, charismatic
figure in Sydney with immense personal wealth, Turnbull
fought off a strong pro-environment sentiment in his seat to
beat a Jewish opponent in a district with a substantial
number of Jewish voters. It was a significant personal
victory for him, and leaves him a good position to challenge
for the Liberal Party leadership now that Peter Costello has
withdrawn from consideration.

THE SENATE CHANGES - BUT ONLY IN JULY


6. (U) One half of the Senate was up for reelection. New
senators however, only take their seats on July 1, unless the
senator is from one of the territories, in which cases he or
she is seated immediately. With Liberal Senator Gary
Humphries being reelected in the Australian Capital
Territory, the Coalition retains its majority until July 1.
At that point neither the ALP nor the Coalition will have a
majority and Rudd will need support from the Green Party,
the Family First senator, and a new, independent senator from
South Australia to pass legislation. Although difficult to
accurately project so soon after the election, analysts are
predicting the Coalition will hold 37 seats, the ALP 32, the
Green Party 5, Family First 1, and one independent. The
Australian Democrats lost all four of its senators and is no
longer a viable political party.

COSTELLO BOWS OUT


7. (C/NF) In his concession speech, Howard had nominated
Deputy Leader Peter Costello as his successor as head of the
Liberal Party. The next day, however, Costello announced he
would not seek or accept the leadership of the Liberal Party.
Having run as part of the leadership team with Howard,
Costello likely realized he had also been repudiated by the
election result. Not as popular as Howard in the Liberal
Party or in the country at large, and faced with leading a
political organization that is broke, demoralized and
out-of-power everywhere in Australia, Costello likely
realized that his prospects in the private sector were
brighter than his chances of winning back power in three
years.

NEW MINISTERS


8. (SBU) At a press conference the day after the election,
Rudd announced that he would choose the members of his
ministry and that the ALP caucus would meet in Canberra on
November 29 to vote on the list. In the past, the ALP caucus
has picked the members of the ministry with an eye to
satisfying the different factions within the party. The
leader then slotted those chosen into the portfolios of his
choice. During the campaign, Rudd announced his economic
team (ref B) of Wayne Swan as Treasurer, Lindsay Tanner as
Minister for Finance, and Julia Gillard, Workplace Relations,
and stated that he would chose the members of his cabinet.
Given his decisive victory, no one doubts that Rudd will be
able to name the members of his front bench.

A MANDATE FOR CHANGE


9. (C/NF) COMMENT: This was a decisive victory for Rudd that
mostly reflected the Australian public's desire for change
after 11 years of the Howard Government. He presented
himself as a new - but conservative - leader who would be a
safe pair of hands. Voters judged John Howard's workplace
relations reform ("WorkChoices") as too harsh. His inaction
on climate change was also a positive issue for the ALP.
Moreover, Rudd ran a better-resourced and much more
disciplined campaign than the Coalition. Rudd has already
Qdisciplined campaign than the Coalition. Rudd has already
vowed to sign Kyoto and begin drafting legislation to
overturn WorkChoices as his first orders of business.
Ultimately, Rudd won the election by keeping the more extreme
elements of his party quiet and selling the message that
voting for him represented positive change without economic
risk. If Rudd can show that he can be a competent steward of
the economy and resist pressure by the unions and Labor's
left-wing (Unions NSW have already released a list of
demands),he could enjoy an extended term of office in a
country that does not change governments very often.

MCCALLUM