UPDATE 2-Truckers protest outside Australia's parliament

Mon Aug 22, 2011 5:56am EDT

* Truck protest circles Australian parliament

* Steelmaker BlueScope to shed jobs

* PM Gillard wins support for carbon offsets plan (Adds vote on carbon offsets laws)

By Rob Taylor

CANBERRA, Aug 22 (Reuters) - Hundreds of truckers circled Australia's parliament on Monday in a campaign aimed at forcing the government to withdraw a proposed carbon tax law, and call new elections, the second anti-government protest in the nation's capital this month.

The truckers sought to draw on public dissatisfaction with Prime Minister Julia Gillard's minority government and perceptions of economic incompetence, despite a robust economy.

"Everyone is on the edge because the country is basically in a state of disarray. We've all been surprised at just how tough everyone is doing it," said transport company owner Peter Whytcross as the "Convoy of No Confidence" trucks blasted horns from roads around parliament and Gillard's home nearby.

Outside the booming mining sector, many Australians are fighting to keep pace with inflation and high house prices combining to make the nation's biggest city, Sydney, one of the world's most expensive places to live.

Despite the country avoiding recession after the 2008 global downturn, a high Australian dollar and weak domestic demand are hurting areas other than the resources sector which is booming on the back of strong demand from China and elsewhere in Asia.

On Monday, the country's biggest steelmaker, BlueScope Steel , announced 1,000 job cuts and closure of half of its steel-making capacity, while Qantas Airways last week said it would cut costs and slash up to 1,000 jobs, shifting much of its international operations into Asia.

Political opponents dismissed the truck protesters as a "convoy of no consequence", saying only a few hundred vehicles circled the hill-top parliament instead of the thousands that the organisers had promised.

"But it has got the moaners' brigade in town to moan about everything in general and nothing in particular," said Greens leader Bob Brown, whose party holds the balance of power in the upper house and is accused by truckers of holding Gillard's Labor to ransom.

LOSING JOBS IN HEARTLAND

The prospect of losing blue-collar steel jobs from Labor heartland areas south of Sydney, however, prompted assurances of support for the manufacturing sector from Gillard and Treasurer Wayne Swan.

"There is no higher priority for us as a Labor government than supporting jobs," Gillard told reporters, while Swan promised a "market-based solution" to help manufacturing companies better compete in the face of overseas competition.

The job losses will add to Gillard's woes as she struggles in opinion polls which predict her government would be swept from office if elections were held. Fresh elections are due in 2013 and Gillard has a one-seat buffer with support from Green and independent lawmakers.

The conservative opposition, riding high in opinion polls, has called for a national vote on the controversial carbon tax, which truckers and miners say would drive up business costs and further erode fragile consumer confidence.

"We can have a vote on the carbon tax without necessarily a change of government. I am making it easier with this bill to have this matter put to the people," conservative leader Tony Abbott told lawmakers.

But in a much-needed political win for Gillard, the government and Greens late on Monday combined in the upper house Senate to endorse laws to set up a carbon offsets market for farmers and foresters.

The laws, the first major package passed since the Greens took the key balance of power votes in the Senate on July 1, are a precursor to the carbon price package, which will be introduced into parliament next week.

(Editing by Ed Davies and Sanjeev Miglani)

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