Australia's new Prime Minister Julia Gillard leaves a special Caucus meeting after a leadership ballot at Federal Parliament House in Canberra June 24, 2010.[Agencies]
CANBERRA - Julia Gillard became Australia's first female prime minister on Thursday when Kevin Rudd stepped down, as the Labor government sought to avoid election defeat later this year by changing leaders.
Gillard is expected to present more of a change of leadership style than substance, but investors hope she will soften a controversial "super profits" mining tax, which is threatening $20 billion worth of investment and has rattled voters.
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Australia's new Prime Minister Julia Gillard leaves a special Caucus meeting after a leadership ballot at Federal Parliament House in Canberra June 24, 2010.[Agencies]
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Rudd become the shortest-serving Australian prime minister since 1972, with his leadership falling apart after a string of poor opinion polls showed him losing ground over recent decisions to shelve a carbon-reduction scheme and impose a new mining tax.
Government lawmakers believe Gillard has a better chance of winning back voters ahead of an expected October poll because she is a warmer personality who can sell policies more effectively.
MINERS EXPECT TAX SOFTENING
Miners have launched multi-million dollar advertisements warning of widespread job losses, spooking voters, if the 40 percent tax goes ahead in its current form in 2012.
Global miners such as Rio Tinto, BHP, and Xstrata are expected to campaign strongly against the tax, if it is not changed, at the next election and help a resurgent conservative opposition's bid to oust Labor."If they've gone to the trouble to put a new leader in to get their re-election chances up, then obviously they're going to water down the mining tax as well -- all part of that strategy to shore up voter support," said Mark Taylor, senior resources analyst at Morningstar.
Despite investor hopes that a leadership change might spell a major backdown on the mining tax, left-winger Gillard's backers expect her to mount a much more effective defence of it.
Some economic analysts expressed concern over Gillard's left-wing, trade union background.
"Clearly this is a positive for the Australian dollar and stocks in the short and medium term," said Su-Lin Ong, senior economist at RBC Capital Markets.
But Ong cautioned: "She has been more left-wing than Rudd; she favours more regulation and spending. So maybe it means the budget deficit shrinks more slowly than otherwise."