SYDNEY — With the Labor Party back in power by the skin of its teeth and with the Greens holding the whip, countries buying essentials from Australia should expect to negotiate more carefully with suppliers of coal, iron ore, uranium and foodstuffs.
Already the minority Green Party is threatening to use its blocking powers in Parliament to stop the approval of billions of dollars of uranium-mining projects. Australia’s biggest export, coal — traditionally going to Japanese steel and electricity plants — is on the Greens’ hit list.
The new climate change minister, Greg Combet, has promised to bring “common sense” to the debate that rocked the last Labor government, warning that he will fight for the coal industry as he pursues a price on carbon emissions. But the new-look Canberra is far less clear-cut on industrial progress than the old one.
These are early days in Canberra and Prime Minister Julia Gillard is still to declare her road map for the booming Australian economy.
Gillard had best declare her hand to the world before Kevin Rudd does it for her. Rudd was Labor leader before Gillard toppled him in an intraparty coup. She then capitalized on her success by announcing a national election.
That election was neither a triumph nor disaster for a surprised Labor Party and even more surprised electors. They voted her back by the smallest margin. After days of back-room bargaining, she persuaded two country independents to drop traditional rural loyalties and swing her way. With key support from the few Greens, she then claimed victory.
A recipe for disaster, Canberra watchers observed. But many other countries survive on minority governments and Canberra, though accustomed to clear-cut party majorities, will stick to its democratic principles. The tensions will simply have to play out.
They have already started. No sooner had Rudd heard that Gillard had given him the job of foreign minister than he booked a flight to New York. Before the new Parliament sits, Rudd will be presenting Australia’s traditional good will to Washington and taking a seat at the United Nations General Assembly.
A new prime minister usually presents credentials to the United Nations, but former diplomate Rudd is determined not be overshadowed even as foreign minister. Talk is of a high U.N. post, expected to be in the controversial pollution-reduction area. Before that, Beijing and Tokyo will be on the jet-setter’s calling card. Both cities are due for new Australian ambassadors.
Gillard-Rudd tensions will not stop there. Julie Bishop, the opposition’s foreign affairs spokeswoman, says the demoted Rudd sees himself as prime minister in exile. She reckons the early move between the dynamic Canberra duo “gives a clear insight into the tensions that will eat away at the heart of the government.”
The opposition, meanwhile, is licking its wounds over its botched election campaign. Liberal Party leader Tony Abbott will have to shore up his losing team and particularly his coalition partners in the rural-based National Party. The conservatives are comforting themselves that infighting will weaken the governing party or, more likely, a fallout with Labor’s Green allies and the mixed-bag independents will lead to another election.
A key area where Abbott will attack the returned government is the influx of boat people arriving in northwestern Australia. The fear of thousands of Afghan and Iranian refugees dispersing into the community coincides with a trial that has begun in the Victorian Supreme Court of five Middle Eastern Muslims charged with plotting to blow up a military base near Sydney.
This sensitive issue hardly figured in the noisy election campaign for fear of encouraging racism. Now the danger of overcrowding in refugee camps across the country makes it unavoidable. New Immigration Minister Chris Bowen says he wants a more “mature” debate on asylum seekers and a real search for an offshore refugee processing center.
The opposition offers the Pacific island of Nauru. There a center built by the earlier Howard government lies empty. But Labor is caught with its long-standing criticism of Nauru and suggests the nearer East Timor. In Dili the East Timorese government is not having a bar of mainly Muslim refugees being dumped on its doorstop. Still, Gillard insists this near neighbor is her preference.
Ghosts from the past keep cropping up. Peter Garrett, Rudd’s controversial environment minister who was demoted after four workers died in a hasty home-insulation scheme, gets a promotion to education. In his student days Garrett led a pop band called Midnight Oil. Now he presides over early childhood education.
Penny Wong, a member of Labor’s Left faction who used to direct climate change laws, is the new finance minister. She promises “tough decisions” as she takes over a razor gang aimed at restoring the budget to surplus in 2013.
A member of the “kitchen Cabinet” that ran the Rudd regime, Wong promises to help restore “traditional Cabinet government,” working beside Treasurer and Deputy Prime Minister Wayne Swan. Swan was a close ally of Rudd until he and Gillard turned on the then-leader, ousted him and went on to win a close election.
One of the independents who will have to help hold together the stitched-up government is Andrew Wilkie. His demand for changes in Labor’s mining tax worry miners who spearhead Australia’s economy. Mining and Exploration Companies executive Simon Bennison says the tax has already warned off international investment.
Labor will try to push through Parliament a resources rent tax that export heavyweights Rio Tinto, BHP Billiton and Xstrata have accepted under protest. Smaller miners are adamant the super-tax will cripple Australia’s future supplies of iron ore and coal to Japan and China.
For all her dubious Cabinet appointments, Gillard has still managed to craft a credible, if controversial, ministry. She has a capable ally in treasurer Swan. The problem of Rudd may fly off toward New York. The vote-losing portfolio of climate change is in the hands of “Mr. Fixit” Combet. Defense Minister Stephen Smith will continue Australia’s troop commitment in Afghanistan. And Gillard herself is one hard nut to crack.
Australian politics have entered an exciting three-year term. Most media commentators got election forecasts wrong. But their pens are poised for revenge. For instance, will the unmarried Gillard’s live-in boyfriend move in with her to Canberra’s version of the White House, The Lodge? Canberra has entered new territory.
Alan Goodall is former Tokyo bureau chief for The Australian.