Australia government ahead in polls, seeks policy revamp

SYDNEY (Reuters) - Australia's ruling Labour party is set for a narrow victory in elections expected to be announced within weeks, two new opinion polls showed on Monday, but it is struggling over key policy issues on climate and asylum seekers.

While the robust Australian economy, in its 17th year of growth, should be a winning ticket for new Prime Minister Julia Gillard, voters believe the opposition is the better economic manager, according to the polls.

Opinion polls published in Fairfax and News Ltd newspapers put Labour ahead of the conservative opposition at 52 percent versus 48 percent.

"They're in front and they've got a primary vote that can deliver victory," John Stirton, research director with pollster Nielsen, told local radio.

Gillard, 48, is Australia's first woman prime minister. She replaced Kevin Rudd on June 24, in a move that has resurrected Labour's electoral standing and reshaped Australian politics.

But political commentators warned that Labour still risked losing elections expected in late August.

"The coming of Julia Gillard to the Labour Party leadership appears to have stopped the decay in her party's fortunes," said The Age newspaper's national editor Tony Wright.

"She has stopped the Rudd rot, though she hasn't been able to make any serious inroads into Labour's loss of the disaffected to the Greens," said Wright.

Labour took power in 2007 promising to tackle climate change, but under Rudd failed to implement a carbon trading scheme, a move which saw Green voters desert Rudd.

Labour needs to woo them back to ensure victory over the Liberal-National opposition.

Gillard has acted quickly on key policies, ending a three-month row with mining companies over a new tax that was hurting the government in the polls, and proposing a regional asylum processing centre, possibly in East Timor, to curb boatpeople arrivals.

The tax deal has been generally accepted by voters, but her asylum policy has received criticism for being in its infancy.

She is expected to this week release her 2010 election climate policy, but it is not clear whether Gillard will go as far as announcing a carbon tax as an interim measure before a full blown carbon trading scheme can be created.

She has said a carbon price is inevitable, probably via a market-based scheme, but that any decision on such a scheme would not be until 2012 and not without community consensus.

But voters want quick action on climate change, according to opinion polls and public comments in local media.

Until now the political risk of announcing a carbon price ahead of an election has been the threat of rising power bills. But two new surveys suggest power bills will rise and energy investment will fall because of a lack of a carbon price.

The lack of an emissions trading scheme and price on carbon would cost the Australian economy and consumers an extra A$2 billion (1.5 billion pounds) by 2020 due to investment in less energy efficient coal-fired power plants, The Climate Institute estimates.

(Editing by Ed Davies and Jonathan Thatcher)

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