In the impasse resulting from Saturday's election, Australia's Labor government is reaping what it sowed by its internal leadership coup and its super-tax on mining companies.
Labor and the party's new leader, Julia Gillard, thought they could pull a fast one on Australian voters by disposing of the incumbent prime minister Kevin Rudd and triumph at the polls by pasting a fresh face on the party. But just two months into her new job as Prime minister, the calculation has clearly failed. Australian voters handed Ms. Gillard something very nearly worse than outright defeat: a minority parliament in which she has to throw herself at the mercies of a Green MP and four independents in order to cling to power. While it is not entirely clear who won Saturday's election it is obvious who lost, and it is Ms. Gillard and Labor.
It is an astonishing feat. Only 2½ years ago, Labor under Mr. Rudd won a majority victory, ending 11 years of Liberal government. There was every expectation that the party would win a second mandate, but policy blunders, in particular a contentious proposed Resource Super Profits Tax, eroded support and led to Mr. Rudd having the distinction of becoming the country's first prime minister to be removed from office by his own party during his first term. Labor stalwarts must wonder now what would have happened if Mr. Rudd had been allowed to fight again.
After the party coup, Ms. Gillard tried to save her government by altering several Rudd proposals, including the plan to tax all resource companies at 40 per cent on profits. She said she would reduce it to a 30-per-cent tax on iron ore and coal profits. However, voter concern that the plan would harm the country's resource base helped Labor divest itself of a number of seats in Queensland and Western Australia, where the impact of the tax policy would be most acutely felt. Ms. Gillard's opponent, Liberal Leader Tony Abbott, meanwhile, led an effective campaign that included a promise to scrap the levy if he becomes prime minister.
That was not his only advantage: He also had the benefit of having achieved his leadership through more usual channels.
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