Australia PM says no intention to call snap poll

A woman holds a sign during a protest on climate change in central Sydney August 13, 2009. Australia's government, fighting to save its carbon trading scheme from defeat, challenged parliamentary rivals on Thursday to drop their opposition, warning of ''a day of reckoning'' on climate change.

CANBERRA (Reuters) - Australian Prime Minister Kevin Rudd said on Friday he had no intention of calling a snap election, despite parliament's rejection of his government's promised plan for an emissions trading scheme.

In the biggest setback to Rudd's agenda since his 2007 election victory, the upper house Senate on Thursday rejected Rudd's emissions scheme after rival conservative, green and independent lawmakers joined forces to oppose it.

If the Senate blocks the legislation a second time after a three-month gap, it would hand Rudd a trigger for an early poll fought on climate, but which if pulled would risk angering voters who in the past have punished governments opting to run early.

"I have not the slightest intention of going to an early poll. I don't think people like that. I think they want you to serve the term that you've been elected for," Rudd told local radio a day after the defeat.

Climate Minister Penny Wong said the government would bring the package back to parliament and try to push it through before a December U.N. meeting in Copenhagen, where world nations will try to hammer out a broad global climate pact.

But Rudd challenged his majority conservative opponents to propose firm amendments to the scheme which would open the door to a negotiation and safe passage of the laws, underpinning what would be the world's broadest emissions trade scheme.

"We just want to get on with the job, because the business community wants certainty for the future and they want us to finish the business," Rudd said.

Passage of the scheme in a second vote, the earliest date for which would be November 16, would depend on whether the government was willing to cave in and hold talks with majority opponents variously wanting the scheme softened and delayed, analysts said.

"The government has declined to talk without the fine print. The next round will be more like mud wrestling if the two sides seriously want to engage," veteran political commentator Michelle Grattan wrote in the Age newspaper on Friday.

But political analysts said Rudd had not ruled out a snap poll that would likely still leave an obstructionist Senate, but bleed strength from conservatives and hand more power to the Greens, making the upper house slightly less fractious.

"Nothing is written in stone and if the numbers suggest he can win an election very convincingly, then no doubt an early election is something they would give serious thought to," said the University of Queensland's Ian Ward.

POLL LEAD

Surveys show Kevin Rudd well ahead in opinion polls and that most Australians favor action to combat climate warming. Elections are due in late 2010.

Rudd has promised emissions cuts of 5-25 percent on 2000 levels by 2020, with the higher end dependent on a global agreement to replace the U.N.'s Kyoto Protocol.

But Green and conservative senators have accused the government of sacrificing environmental concern for an election trigger that would allow Rudd's Labor to skirt delivery of a tough budget next May amid higher unemployment.

As evidence, they point to linking of the emissions scheme to widely-backed plans to set a mandatory target for 20 percent of Australia's electricity needs to come from renewable wind, solar and geothermal projects by 2020, up from 1.7 percent.

"Now the government finds its bluff called. It can't responsibly afford to leave the bills linked. That would be counterproductive, both politically and in terms of good policy," wrote Grattan.

Renewable energy firms warned passage of the renewables laws, to be voted on next week, was critical to unlock up to $22 billion in planned renewable energy projects and create up to 28,000 new jobs amid generally rising unemployment.

"The RET needs to be de-linked, strengthened for solar, and passed. Otherwise we are risking Australia's future," said Bob Matthews, chief executive of thermal power company Ausra.

Debate on unlinking the two schemes began in parliament on Thursday after the emissions scheme defeat, with signs the government may agree to pass the renewables scheme next week when parliament resumes.

The possibility of a deal has seen the price of tradeable Renewable Energy Certificates (RECs), underpinning the renewable energy market, strengthen by around 1 percent to A$37.75 ($31.83) over the past week, said broker Newedge Australia.

REC prices plummeted in June after the Senate deferred consideration of the RET scheme amid uncertainty over the carbon emissions scheme. The price has stayed low, wiping millions from the value of existing solar, wind and geothermal projects.

The link ties compensation to big polluters under the carbon scheme to assistance for coal-fired electricity generators to help them adjust to the renewables target.

"We've said to the Liberals all along, if you've got an amendment, bring it forward," Rudd said.

($1 = 1.186 Australian Dollar)

(Additional reporting by Michael Perry in SYDNEY; Editing by Michael Perry)