DOMESTIC POLITICS: The Labor Party, led by Mr Rudd, has a commanding majority in the House of Representatives (the lower house) and a strong public mandate. Now into the second half of his three-year term, Mr Rudd still enjoys high approval ratings, having made a series of popular decisions, including ratifying the Kyoto Protocol on greenhouse gas emissions, issuing a public apology to Aborigines and reintroducing collective bargaining in the workplace. However, Mr Rudd is being forced to defend his government from opposition criticism of its economic management, as economic growth has slowed and the public finances have deteriorated. The government will be able to argue that the performance of Australia's economy in the global economic crisis has been better than that of other developed economies--in our view it is the only developed country that is expected to register growth in GDP in 2009. The government can point to bold policy decisions taken to cushion the domestic impact of the crisis, including major fiscal stimulus packages, and guarantees of deposits and wholesale borrowing for many financial institutions. These measures will enable Mr Rudd to make a strong defence of his response to the crisis, and it is unlikely that he will be dislodged from office at the next general election.

Source: Australia: Country outlook

Source: Country Forecast Australia May 2009

Source: EIU Country Data