FACTBOX-Iraq and economy hold keys to Australian election

Oct 14 (Reuters) - Here are the main policy issues for Australia's national elections to be held on Nov. 24:

IRAQ

Australia's election will decide the future for Australia's military commitment in Iraq.

Australia has about 1,500 troops in and around Iraq, and conservative prime minister John Howard was one of the first to commit to the U.S.-led war against Saddam Hussein in 2003.

Howard, a close friend and ally of U. S. President George W. Bush, has promised Australian forces will remain in Iraq until it can look after its own security.

Opposition Labor leader Kevin Rudd has promised to withdraw about 500 Australian frontline troops, who are mainly based in Iraq's relatively peaceful south.

CLIMATE CHANGE

Howard's government has steadfastly refused to ratify the Kyoto Protocol or set targets to cut greenhouse gas emissions, saying the move would unfairly hurt Australia's economy and massive coal exports.

Labor has promised to ratify the Kyoto Protocol, which sets binding targets for greenhouse gas emissions, and has promised to cut carbon emissions by 60 percent of 2000 levels by 2050.

Climate change has become an increasingly important issue, with Australia going through its worst drought in a century and most Australians now subjected to restrictions on water use because of the long dry period.

Labor says Howard is out of touch and a climate change sceptic, while the government has accused Labor of a knee-jerk response that will hurt Australia's economy and ongoing prosperity.

LABOUR LAWS

In his fourth term, Howard introduced sweeping new labour laws which make it easier for employers to sack workers, limit the influence of unions, and encourage workers to sign individual work contracts rather than work under award conditions.

Employers, particularly mining companies in booming Western Australia state, have embraced the new laws, which give added flexibility to their operations.

But the laws have led to increased uncertainty among workers, with the union movement running a concerted campaign warning that bosses can now sack workers with no reason, and hire them back on lower wages -- claims the government rejects.

Labor has promised to wind back the workplace laws.

ECONOMY

Economic management has long been an electoral strength for Howard's conservative government, which has presided over 11 years of sustained economic growth, with close to full employment and record levels of private share ownership.

Howard won his fourth term in office in 2004 on the back of his government's strong economic management, tight control of government spending and promises to keep inflation and interest rates low.

A sustained boom, fuelled by China's demand for Australian resources, has put pressure on inflation and interest rates, which have risen five times since Howard won the last election with a promise to keep rates low.

Interest rates are a sensitive political issue in Australia, where home ownership is a national obsession.

Housing affordability is at record lows and many people in key outer suburban electorates are feeling the impact of rising interest rates and increasing levels of debt.

Home loan mortgage rates have risen five times since the last election, with economists forecasting another possible hike in the months ahead, blunting Howard's usual advantage over Labor on economic management. Labor's Kevin Rudd has attempted to neutralise the economy as an issue through television advertisements where he says he is an economic conservative.