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Australian PM Gillard announces new cabinet

CANBERRA (Reuters) - Australian Prime Minister Julia Gillard unveiled her new cabinet on Saturday, with Wayne Swan retaining his treasury portfolio and former climate minister Penny Wong moved to the senior finance portfolio.

Australia's Prime Minister Julia Gillard speaks during a news conference with Treasurer Wayne Swan in Parliament House, Canberra, September 7, 2010. REUTERS/Andrew Taylor

Gillard also kept Martin Ferguson in the key Resources and Energy portfolio, where he will be crucial to pushing through plans for a 30 percent tax on the profits of big iron ore and coal mines.

In other changes, former union leader Greg Combet was promoted to a cabinet position as Minister for Climate Change to replace Wong, while Anthony Albanese stays at transport and infrastructure.

Combet, a political trouble-shooter known for his negotiating skills, faces the task of drawing up a plan to put a price on carbon pollution, blamed for global warming, and finding community consensus for action against climate change.

“The ministry continues a strong emphasis on economic management and the creation of jobs,” Gillard told reporters in Melbourne.

“We have sought to provide stable economic management, and we have sought to focus on jobs. That kind of economic stability will continue, as will our approach to ensure the budget comes to surplus in 2013.”

But the difficulties facing the government were underlined when independent Andrew Wilkie demanded changes to the planned mining tax, which the opposition had threatened to scrap during the campaign for last month’s election if it took office.

Wilkie told The Australian newspaper he would not support the new Minerals Rent Resource Tax (MRRT) unless it was redesigned and possibly expanded to include more mining projects.

“I think we need to go back to the drawing board because the MRRT as it is currently designed is unsatisfactory,” he told The Australian.

Gillard last week secured a second term in office in the aftermath of the close election with the support of three independents and a Green MP. Hers will be the first minority government since World War Two, raising concerns the administration will be unstable and may not run its full term.

The new ministry is Gillard’s first chance to put her stamp on the government since the ruling Labor Party dumped former Prime Minister Kevin Rudd in late June, as she made only minor changes to the cabinet ahead of the August 21 election.

In a bid to heal some of the internal tensions over her move against Rudd, Gillard gave Rudd the senior role of Foreign Minister in her new government.

But two Labor figures, Mark Arbib and Bill Shorten, key players in the move to dump Rudd in favor of Gillard, were also rewarded.

Arbib moves from the junior employment participation portfolio to become the Minister for Indigenous Employment and Economic Development, while Shorten becomes Assistant Treasurer.

The cabinet reshuffle was made easier by former finance minister Lindsay Tanner retiring from politics and former defense minister John Faulkner announcing before the election that he would stand down from the ministry.

Former foreign minister Stephen Smith was moved to defense, with responsibility for policy on Afghanistan, where Australia has around 1,600 troops.

Former Small Business Minister Craig Emerson will be the new Trade Minister.

Editing by Ron Popeski