February 27, 2012 / 4:25 AM / 7 years ago

UPDATE 4-Australia PM Gillard wins leadership ballot, govt claws back voter support

* PM Gillard easily wins leadership vote, 71 votes to 31

* Poll shows Labor government support up, despite bitter brawl

* Gillard says can win next election, due by mid-2013

* Faction boss and junior minister resigns

By James Grubel

CANBERRA, Feb 27 (Reuters) - Australian Prime Minister Julia Gillard convincingly won a leadership vote against rival Kevin Rudd on Monday, just as opinion polls showed her unpopular minority government clawing back voter support despite the bitter fight to head the party.

In a victory news conference, Gillard said the battle in the Labor party had been “ugly” and that Australians were fed up with the political brawl, but promised her government would now unite and put voters first, adding she was convinced Labor could win the next election due by mid-2013.

“Today I want to say to Australians... the leadership question is now determined,” said Gillard, who won the vote 71 to 31, ending former foreign minister Rudd’s hopes of returning as prime minister before the next election.

“I understand that many Australians will have their doubts that after this fight Labor will come together in a united way. We have come together before and we will do so now,” she said.

“I absolutely believe that united we can win the next election. I will take Labor to that election and I am confident we can win that election.”

Leading pollster Newspoll on Monday showed that Labor was recovering some ground, rising two points to 47 percent, though it still lags the opposition’s 53 percent.

“I accept fully the verdict of the caucus and I dedicate myself to working fully for her re-election as the prime minister of Australia, and I will do so with my absolute ability dedicated to that task,” Rudd told reporters after the vote.

GILLARD NEEDS NEW POLICY VICTORIES

Gillard said she would soon announce a new foreign minister to replace Rudd, but may use the opportunity for other ministerial changes and to demote ministers who backed Rudd.

She will also need to replace Assistant Treasurer Mark Arbib, a senior factional boss who helped engineer the coup against Rudd in 2010 and who announced he would leave politics on Monday, saying his resignation was a gesture of goodwill to help unite the party.

Arbib sits in the upper house Senate and his resignation will not threaten the minority government, as his seat will be filled by another Labor candidate.

Gillard said she was not planning any major policy changes to the unpopular carbon tax, due to start on July 1, the same day as a new 30 percent tax on iron ore and coal mines.

Rudd’s supporters earlier put Gillard on notice that whatever the leadership result, she must lift the government’s standing in opinion polls or she could still be dumped.

To do so, Gillard needs to deliver a budget in May that wins over voters, show the carbon and mining taxes will not cost jobs and damage the economy, and sell the good news story of the Australian economy, the best performing in the developed world.

But political analysts are divided on whether she can achieve the political stability needed to be re-elected.

Sydney University political analyst Peter Chen said he believed Rudd could still recover from Monday’s vote and return as a leadership rival, as he has not ruled out being drafted back to the prime ministership if Gillard falters.

“This isn’t the smack-down victory for Gillard that means this issue will go away. She will get a few weeks’ grace before this issue boils back into the public eye again,” Chen told Reuters. “This issue is going to continue to dog the government. It will come to a head again before the end of the year.”

Gillard called the leadership vote to stamp her authority over the governing Labor Party after Rudd suddenly quit as foreign minister in Washington last week after weeks of mounting infighting between the two camps.

But former Labor Party leader Mark Latham said it was an overwhelming vote of support for Gillard, and Rudd would be unable to mount a second challenge on the back of the result.

“There’s no way Rudd, on those numbers, can come back to the leadership,” Latham told Sky television.

Financial markets largely ignored the leadership fight, given only minor policy differences between Gillard and Rudd.

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