RUDD HAS A VERY GOOD WEEK

UNCLAS SECTION 01 OF 02 CANBERRA 000140 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PGOV AS SUBJECT: RUDD HAS A VERY GOOD WEEK REF: A) CANBERRA 126 B) CANBERRA 125 ¶1. (SBU) SUMMARY: Kevin Rudd burnished his leadership image this week by issuing an emotional apology to indigenous Australians, particularly the "Stolen Generations" and by coolly managing his first foreign crisis, the attack on East Timorese President Ramos-Horta. By closing the apology issue Rudd won points as a national conciliator. In his swift measured dispatch of security personnel to Dili following Ramos-Horta's shooting, Rudd showed decisiveness in reacting to a foreign emergency - an attribute earlier claimed as the province of former Prime Minister John Howard. Rudd easily fended off concerns about increasing inflation by blaming the Howard government, but will be under greater pressure to show results once his first budget is submitted in May. END SUMMARY APOLOGY TO INDIGENOUS AUSTRALIANS CLAIMS MAJORITY SUPPORT ¶2. (SBU) The first big initiative taken by Rudd as Prime Minister was an act of symbolism that appealed to the Left: an apology to the Stolen Generations - which refers to the Aboriginal children who were taken from their families by white Australia between 1910 and 1970. Former Prime Minister Howard's refusal to use the term "apology" had been popular in his earlier terms. Issuing a formal apology had been a long-standing Australian Labor Party (ALP) policy but one which Rudd - determined not to be "wedged" by then Prime Minister Howard on issues such as this - had barely mentioned in Opposition. This week however, with the weight of office behind him and still highly popular, Rudd judged the time was right to issue the apology -- particularly when he ruled out government compensation. RUDD SCORES MAINSTREAM POINTS WITH A "LEFT" ISSUE ¶3. (SBU) While a Galaxy poll found 55 percent of respondents favored an apology and 36 percent opposed, the overwhelming majority of those interested in this issue are from the Left. Importantly, the media was also behind Rudd on this issue. Nevertheless, the image of Rudd was one of a compassionate, unifying Prime Minister. His joint presentation with Opposition Leader Brendan Nelson of a gift from the Stolen Generations to the Speaker, and his invitation to Nelson to co-lead a "joint policy commission" to address Aboriginal living conditions, is likely to be welcomed by a public tired of partisan bickering between the parties. IN HIS COMFORT ZONE ON EAST TIMOR ¶4. (SBU) Rudd also stepped out in his handling of the crisis in nearby East Timor. Rudd called a press conference at Parliament House following the shooting of the East Timorese President Jose Ramos-Horta on February 11, calmly briefing journalists on developments and announcing the decision by the Cabinet to send several hundred additional troops and police to East Timor. The next day, the head of the East Timor army suggested international forces could have done more to prevent the shootings - a provocative statement. Rather than hitting back with counter-accusations, Rudd took the wind out of his sails by calmly pointing out that the Australian Defense Force was not responsible for the President's close personal protection. Rudd then announced that on February 15 he would fly to Dili for meetings with Prime Minister Xanada Gusmao. On the key issue of national security and foreign affairs - an issue where the Coalition has consistently led the ALP in opinion polls - ex-diplomat and Foreign Affairs spokesman Rudd demonstrated his ability Qand Foreign Affairs spokesman Rudd demonstrated his ability to make a swift, appropriate response and keep a cool head. IN PARLIAMENT MASTER OF QUESTION TIME ¶5. (SBU) In the first Question Time of the year, eagerly awaited by the Press Gallery, the Opposition targeted the Government on the economy, particularly inflation. Unlike some of his Ministerial colleagues, who appeared less than comfortable under the opposition grilling, Rudd maintained a cool and calm demeanor, making little reference to his notes as he demonstrated a sound grasp of the economic facts and figures. In the face of very spirited attacks by the Opposition MPs, Rudd remained unflustered. RUDD SETS INFLATION AS HIS LONG-TERM PRIORITY ISSUE ¶6. (SBU) Developments in East Timor and the apology overshadowed what Rudd has declared is his Government's top priority - fighting inflation. On Monday, the Reserve Bank issued its quarterly statement on monetary policy which CANBERRA 00000140 002 OF 002 warned of continuing inflationary pressures and, as a result, further interest rate rises are likely. To minimize the political damage, the Government is for the time being able to argue to the public that inflationary pressures are the Howard Government's legacy. How long this argument will be viable is open to question. In May, Treasurer Wayne Swan will hand down his first budget, with the goal of putting downward pressure on inflation by reigning in spending. This could put the first dent in the Government's popularity. At this point in time however, Rudd is riding a wave of popularity and has come through his first parliamentary sitting week of the new government appearing up to the job and fully in charge. MCCALLUM