Australia PM puts economy at heart of re-election

By Michael Perry

CANBERRA, July 15 (BestGrowthStock) – Australian Prime Minister
Julia Gillard sought to sell her Labor government’s economic
credentials on Thursday, warning that the conservative
opposition’s policies could risk a robust economy.

In her first major economic speech since becoming prime
minister on June 24, Gillard set out her platform for
re-election at polls expected within months, centering on job
creation.

“I believe a strong economy is the foundation of everything
else that as prime minister I want for this great country of
ours,” Gillard told the National Press Club in Canberra.

“As prime minister I will make my economic judgments based
on what gives Australians the best opportunity for access to
work.”

The government, on course for a narrow election victory
according to opinion polls, tweaked its economic forecasts on
Wednesday, predicting robust commodity prices due to Chinese
demand will ensure the budget returns to surplus in 2012/13,
far ahead of most other rich nations.

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It also forecast unemployment would fall to 5 percent in
2010-11 and 4.75 pct in 2011-12.

Gillard said the economy had emerged from the global
financial crisis stronger than many other developed nations due
in part due to the government’s A$52 billion ($46 billion)
stimulus package in 2009.

“I say to the Australian people, now is not the time to
take risks with the Australian economy,” said Gillard,
Australia’s first female prime minister who appears far more at
ease dealing with the media than her predecessor Kevin Rudd.

“It is a time for prudent and careful economic management,
not a time to take risks with a Liberal Party that got it wrong
on the global financial crisis, that opposed (stimulus) action
to support Australian jobs and that would have allowed hundreds
of thousands of jobs to be destroyed.”

Gillard said a new mining tax, which is forecast to raise
A$10.5 billion in revenue from 2012, would fund a cut in
corporate tax and a rise in pensions but would be dumped by
conservative leader Tony Abbott if he was elected.

“Remarkably, my opponent would deny Australians these
benefits because he is refusing to accept the tax that our
biggest mining companies have agreed to pay,” she said.

PM SELLS ECONOMIC CONSERVATISM

Economic management is traditionally a major issue in
Australian elections. And while Australia’s healthy economy, in
its 17th year of growth, should be a winning ticket for the
government, voters still believe the opposition has the edge in
economic management, according to opinion polls this week.

The opposition, which ruled for 12 years before Labor was
elected in 2007, is also committed to achieving a budget
surplus, and has said it would put downward pressure on
interest rates, cut debt and cap spending.

But it differs from the government over its opposition to a
new mining tax and a planned carbon price to fight climate
change.

Despite her left-wing background, Gillard has sold herself
as an economic conservative, dismissing concerns her government
would be an old-style, big-spending Labor administration.

Gillard said growth in spending would be capped at 2
percent a year once the economy was growing above trend.

She also said Australia could not rely solely on its
resource sector for future economic prosperity, warning doing
so could create a two-speed economy of haves and have nots.

“Australia today is a great beneficiary of the economic
growth in China and the demand for our mineral resources in our
region. But if anyone thinks that gives us a free ticket to
easy prosperity, they are mistaken,” she said.

She said a re-elected Labor government would push for
micro-economic reforms to ensure Australia remained a
competitive and modern economy, but also provided social
dividends.

“The microeconomic challenges of the future are not a
simplistic choice between the market and the state,” said
Gillard.

“Simply applying the extreme free-market medicine of
liberalisation and privatisation without thought or care is not
a solution. Maintaining an instinctive hostility towards the
public sector and all it provides is equally wrong.”
($1 = 1.131 Australian Dollar)
(Editing by Ed Davies and Sugita Katyal)

Australia PM puts economy at heart of re-election