SYDNEY, June 27 – Kevin Rudd’s victory as leader of Australia’s Labor party was just the start of a struggle to resuscitate its prospects in the next election as the opposition prepares to exploit the governing block’s divisions.

Rudd, 55, prevailed yesterday over Julia Gillard, 51, in a 57-45 vote among Labor lawmakers that underscored the party’s split between the man who swept Labor to power in 2007 and the woman who ousted him in 2010 after his colleagues grew fed up with a leadership style that eschewed consultation.

Rudd (left), with deputy Albanese, talks to the media after winning the party vote June 26, 2013. – Reuters pic

The former diplomat, who last year said he’d learned lessons during his first tenure as prime minister, now faces an election with a weakening economic outlook that’s prompted the central bank to cut interest rates to a record low. While Labor turned to Rudd after polls showed it would do better under him than Gillard, the risk is its gap to Tony Abbott’s Liberal-National coalition remains in the absence of party unity.

“The somewhat more positive view of Labor under Rudd that the public has expressed is set to be tested because it’s always been a hypothetical,” said Peter Chen, who teaches politics and public policy at the University of Sydney. “Whether that will last under a relentless and well-funded campaign by the opposition, just using everything that everyone has said about Rudd’s personality and things like that” remained to be seen, he said.

First up for Rudd, a fluent Chinese speaker who was previously scheduled to head to Beijing today to attend a conference, is securing his return as prime minister via the approval of the nation’s Governor-General. The lower house of Parliament sits today for the final time before an election scheduled for September, and Rudd would need the support of independent lawmakers if Abbott called a no-confidence vote.

Swearing in

Rudd was sworn in as prime minister by Governor-General Quentin Bryce, along with his new deputy Anthony Albanese and Chris Bowen as treasurer.

The opposition won’t call a no-confidence motion in Rudd’s government in parliament today, Abbott indicated in a television interview.

“There have been far too many parliamentary games, there’s been far too much backroom dealing and double crossing,” he said. “Let’s let the people decide.”

Cabinet changes

Next, Rudd will need to fill Cabinet positions vacated by supporters of Gillard, the nation’s first female prime minister.

Rudd has been criticised by colleagues including Wayne Swan – who resigned as Treasurer and deputy leader – for an autocratic style, raising questions over whether Labor can rally behind him before the election.

Climate Change Minister Greg Combet announced his departure from the ministry, with Swan replaced as deputy Labor leader by Albanese. Agriculture Minister Joe Ludwig also stepped aside, as did Trade Minister Craig Emerson and Education Minister Peter Garrett. Communications Minister Stephen Conroy quit and was replaced as Senate leader by Penny Wong.

“It’s a task I resume with humility, with honour, and an important sense of energy and purpose,” Rudd told reporters in Canberra last night. “I intend to lead a government that brings people together and gets the best out of them.”

Legislative landmarks

The Labor leader will need to craft an election platform, deciding whether to keep the initiatives pioneered by Gillard, who won greater legislative landmarks during her tenure in charge of a minority government than Rudd did with a majority.

Gillard, who yesterday said she’d retire from politics at the next election, had been running on strengthening education, expanding access to broadband Internet connections and boosting funding for disability services.

Labor faces a 14 percentage point deficit in opinion polls. The coalition led Labor 57 per cent to 43 per cent on a two-party preferred basis, designed to gauge which party is most likely to form a government, according to a Newspoll published in The Australian newspaper on June 24.

Rudd’s return would lift Labor by 11 percentage points in the primary vote to 40 per cent, compared with the coalition’s 42 per cent, according to a Nielsen survey published in Fairfax newspapers June 17.

‘Without precedent’

Even so, with signs of a slowdown in the world’s 12th-largest economy, including worsening employment prospects and a waning of the mining boom, momentum remains with Abbott.

The re-election of Rudd as Labor leader is “high on the Richter scale of desperation – it’s without precedent,” said Haydon Manning, a politics professor at Flinders University in Adelaide.

Rudd will face questions about his own trustworthiness, having said on March 22 “there are no circumstances” in which he would return to the Labor leadership and pledging “100 per cent support” for Gillard. A year earlier, she won a ballot against him by 71 votes to 31 in the caucus.

“I want to say directly to the people of Australia, you deserve better than this,” Abbott, 55, told reporters last night. “In 2007, you voted for Kevin and got Julia. In 2010, you voted for Julia and got Kevin. If you vote for the Labor party in 2013, who knows who you’ll end up with.” Abbott called on Rudd to state whether he will stick to Gillard’s timetable for a September 14 election.

Gillard legacy

Gillard’s defeat came hours after she won parliamentary backing for A$9.8 billion (RM29 billion) in extra federal funding for schools over six years from 2014-15, adding to legislative accomplishments that failed to translate into public support for Labor. She had also advocated a new levy that will collect A$20.4 billion for the disabled by mid-2019.

In an interview in April, Gillard said her legacy was secure after introducing a carbon price and improving education, which was “closest to my heart”.

“I believe this will be remembered as a time in which we got all the elements right to seize the opportunities of this century of change in the region,” Gillard said at the time. “When I’m an older person and sitting back in the retirement home watching our nation, I will be seeing a stronger nation because we have done those things.”

It is unclear if Rudd will support some of Gillard’s big-ticket policy items that she struggled to sell to voters, including the nation’s first levy on greenhouse-gas emissions and a tax on mining company profits that will reap A$1.8 billion less in revenue for the year to June 30 than previously forecast, according to budget documents released May 14.

Rudd antipathy

While Rudd has greater support than Gillard among the general public, he has faced antipathy from Labor’s senior ranks over his leadership style. Swan last year described him as a man of “great weakness” who had demeaned his party colleagues during his tenure as prime minister from 2007-10.

Rudd remained on the backbench since resigning as foreign minister last year, when he challenged Gillard and failed.

Speculation about a fresh contest intensified as Rudd this month made campaign appearances in competitive districts. Momentum swung his way when party powerbroker Bill Shorten, who as recently as yesterday morning said he supported Gillard, called a press conference 30 minutes before the ballot to say he’d switched his allegiance.

Rudd will have to rebut opposition attacks on Labor’s economic stewardship after the government failed to meet its pledge of a budget surplus in the current fiscal year.

Mining boom

Even as the economy expanded in 2012 at its fastest pace in five years, unemployment has risen in some areas. While Chinese demand for iron ore and coal has driven a mining boom in the country’s north and west, manufacturing areas in the east have struggled, with the Aussie dollar in the past three years averaging 30 cents above the level of the prior two decades.

Much of the manufacturing downturn has hit electorates with a track record of voting Labor. One casualty was Ford Motor Co., which announced on May 23 it would end production in the country after nine decades, with the loss of 1,200 jobs.

Gillard’s record in pushing through groundbreaking legislation, including the world’s first compulsory plain packaging for cigarettes, was overshadowed by scandals involving Labor lawmakers.

Craig Thomson, a former national secretary of the Health Services Union, faces charges he misused a union credit card to pay for prostitutes between 2002 and 2007, before he entered parliament. Thomson, who resigned from Labor and sits in parliament as an independent, denies the allegations.

Rudd might be better at selling Labor’s policy message to voters than Gillard, said Nick Economou, a political analyst at Monash University in Melbourne.

Even so, “he is a double-edged sword”, Economou said. “He ran a really poor government, he was a poor leader in government and a poor leader of his troops. Where he is very good is on the stump and in communicating.” – Bloomberg