Australian PM shrugs off big by-election swing against gov’t


SYDNEY, Reuters


Australian Prime Minister John Howard shrugged off a big by-election swing against his conservative government on Sunday, maintaining he could still win a national poll due later this year.

“It’s a bad result,” Howard said on Sunday of the 10 percent swing against his government in wealthy suburban Ryan, once regarded as one of the safest seats held by his Liberal party.

The center-left Labor party, out of power for five years, needs a swing of just one percent to oust his Liberal-National coalition in the national election expected in November.

But Howard asserted: “We certainly can win the next election”, and some analysts agreed it was too early to write him off as a loser in the federal poll.

Saturday’s by-election in Ryan has left Labor hovering within a few hundred votes of victory and electoral officials say the result will depend on pre-poll and postal votes, which can be received until March 30.

Howard, keenly aware that the Australian dollar is wallowing at record lows below 50 U.S. cents, tried to reassure financial markets that the by-election result would not prompt him to ditch his allegiance to economic rationalism.

“This country is irrevocably on the path to change and reform,” he told reporters.

Howard has already been humiliated twice this year in state parliamentary elections as voters demonstrated their anger over tax changes and free market reforms.

He has responded with concessions including cuts in petrol taxes and extra money for new home buyers, but the intensifying political uncertainty has added to the Australian dollar’s woes.

On Sunday he kept open the prospect of more sweeteners by saying he would consider compensation for disadvantaged groups.

“I do understand that people can be hurt in the process (of economic reform),” he said.

Financial markets are particularly concerned about how Howard will handle the current bid by world oil giant Royal Dutch/Shell for Australia’s Woodside Petroleum Ltd.

The government has held off foreign investment approval for the bid. It is widely expected to set conditions for the takeover in deference to a growing anti-globalization lobby that spans the political spectrum.

A key test of how Howard balances political need and economic rectitude will be whether he delivers a vote-buying budget in May. Some analysts say it won’t matter.

“Labor is going to win the next federal election anyway,” political commentator Malcolm Mackerras told Reuters. Mackerras gives Howard only a one in five chance of winning.

A more immediate risk for Howard is a political bloodbath within his coalition government.

But Labor leader Kim Beazley stopped short of claiming the Ryan result put him on the road to certain victory.

And John Edwards, chief economist of banking group HSBC and a close political observer, said that Howard had already shown skill in fostering the idea that Labor might win Ryan decisively — enabling him to claim the result wasn’t so bad after all.

“I think that just underlines the clever political fighter he is. It’s much too early to write John Howard off,” Edwards said.