END OF RUDD HONEYMOON DOES NOT HELP NELSON

UNCLAS CANBERRA 000660 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PGOV SENV AS SUBJECT: END OF RUDD HONEYMOON DOES NOT HELP NELSON REF: CANBERRA 653 ¶1. (SBU) SUMMARY: Two days after the Australian Labor Party's (ALP) loss in the Gippsland by-election (reftel),support in the polls for the ALP and Rudd has slumped to its lowest level since the election. The ALP's lead over the Coalition has fallen eight points to 55-45 and Rudd's satisfaction rating has dropped to 54 percent, indicating that the Rudd Government's honeymoon with the public is over. However, Opposition Leader Brendan Nelson has barely dented Rudd's huge lead as preferred Prime Minister, which now stands at 64-15. Concurrently, Newspoll conducted a survey on attitudes to a carbon trading scheme - an issue which has implications for jobs and petrol prices. A majority of respondents said they were prepared to pay more for gasoline under such a scheme, provided it helped slow global warming. Notwithstanding the loss in Gippsland, which may have been exacerbated by fears of the cost of carbon emissions caps, this indicates that Rudd could turn an emissions trading scheme into a positive for the ALP politically if he can explain it to his "working families" and assist them to adjust to it. END SUMMARY. SUPPORT FOR ALP FALLS, BUT NELSON GOING NOWHERE ¶2. (U) The June 27-29 Newspoll in the "Australian" newspaper had the ALP's two-party preferred lead falling from 59-41, two weeks ago, to 55-45, a drop of four percentage points. Rudd's lead over Nelson as preferred Prime Minister decreased from 68-13 to 64-15 - still a huge lead. However, Rudd's net satisfaction rating (the difference between his satisfaction and dissatisfaction rating) has fallen 12 points to 22 points - its worst level since the election. Rudd's satisfaction rating is 54 percent, down from 59 percent two weeks ago and 71 percent in April. Nelson's approval rating, on the other hand, virtually has not shifted, despite a more favorable political climate, and his outmaneuvering of Rudd on petrol prices. For the third poll in a row, thirty-six percent of the public are satisfied with his performance. Dissatisfaction with Nelson, however, has risen from 36 percent in April to 42 percent in the latest survey. SUPPORT FOR EMISSIONS TRADING SCHEME ¶3. (U) While voters in agricultural and coal-rich Gippsland appeared to have concerns with climate change, the Newspoll showed 61 percent of voters believed a carbon emission trading scheme would slow global warming. Encouragingly for Rudd, it showed 56 percent were in favor of paying more under such a scheme, provided it helped slow global warming. Forty two percent were in favor of petrol being exempted from the scheme while 46 percent were against. COMMENT: OPPORTUNITY FOR RUDD; NELSON DOOMED ¶4. (SBU) A lead of 55-45 for the ALP is still substantial. The result in the 2007 election was 52.7 for the ALP to 47.3 for the Coalition. Rudd's support has fallen but from stratospheric levels. It appears that the public has made its mind up about Brendan Nelson, as several Liberal Party insiders have noted to us recently. Despite the Coalition's win in Gippsland and its improved poll performance, Nelson's approval rating has not budged, and the consensus remains that he will be replaced before the next election. As the ALP demonstrated when it replaced Beazley with Rudd, the leader has a significant impact on party support. The Coalition put climate change on the political agenda last week as part of its campaign in Gippsland so the poll on emissions trading costs is good news for the ALP. It Qemissions trading costs is good news for the ALP. It indicates that voters remain concerned about climate change (a positive issue for Rudd in Opposition) and that most voters are willing to endure a little bit of pain to address it. MCCALLUM