By Michael Perry
CANBERRA (Reuters) - Australian Prime Minister Julia Gillard is likely to call an election on Saturday, broadcaster ABC said, taking advantage of a rebound in support for her party as it struggles to sell policies on the economy, resources, climate and asylum seekers.
The Australian Broadcasting Corporation said Gillard would visit Governor-General Quentin Bryce in Canberra on Saturday morning to seek permission to call an election for August 28.
"I'm not engaging in election speculation," she told reporters earlier on Friday, but media speculation grew that she would call a late August poll on Saturday or next weekend.
"But whenever the election is called, there will be a very clear choice about whether Australia moves forward or back"
Her office declined comment on the ABC report.
Australia's first woman prime minister has resurrected the Labor party's standing with voters after a party coup saw her topple Kevin Rudd on June 24, but opposition leader Tony Abbott needs to win only nine seats from the government to take office.
Gillard has pledged to introduce a new 30 percent mining tax if elected, raising A$10.5 billion (6 billion pounds) from 2012, but the conservative opposition has vowed to dump the tax, even though it has been agreed by global miners BHP Billiton, Rio Tinto and Xstrata.
The government has said it will return a budget surplus by 2013, but opinion polls show voters view the Liberal-National opposition as better economic managers, despite Labor steering the economy through the global financial crisis and avoiding recession.
"We're coming back to surplus in 2013 and I'm not going to have an old-fashioned election spendathon," said Gillard on Friday, pitching herself as an economic conservative.
"Any new spending we announce in the election campaign will be offset by savings to keep that all-important budget surplus."
The opposition has also promised a return to surplus and tight controls on spending.
Gillard said she planned to fight the election on a platform of creating jobs. "The election is largely going to be fought on whether or not you believe it's important for the government to support jobs," she said.
Financial markets showed no reaction to the report of an election with the Australian dollar steady at $0.87/85.
Michael Blythe, chief economist at Commonwealth Bank of Australia, said there would be very little market impact regardless of who wins the election.
"It is very difficult to see any real impact on the economy or markets due to election uncertainty. The broad thrust of policy is going to be the same whatever the outcome," he said.
Shane Oliver, head of investment strategy at AMP Capital Investors, said: "Historically, during an election campaign, the markets have moved sideways. So I reckon we will be range-bound for the next few weeks."
GREENS KINGMAKERS
Many voters have deserted the major parties for the small Greens party, which is set to be the kingmaker in the upper house Senate and influence policy of the next government.
The Greens have said they will be constructive in the Senate and point to their backing of a A$52 billion stimulus package in 2009. They have not rejected the government's mining tax, but want to scrutinise the legislation and want tax revenue put into a sovereign fund for infrastructure building.
The government has said it would use the revenue to lower corporate tax and boost pension savings.
The Greens' major demand on the next government is for the introduction of an interim carbon price ahead of a market-based emissions trading scheme.
The Labor government lost voter support in the past year over its failure to introduce a carbon trading scheme to fight climate change and business has warned that a lack of a clear climate policy is now hindering investment in the power sector.
Gillard has said it is inevitable Australia will adopt a carbon price, but her government will not make a decision on a carbon trading scheme until 2012-13. In contrast, the opposition is opposed to a carbon price or a trading scheme.
On the issue of asylum seekers and border protection, which is resonating in key marginal seats, Gillard has proposed a regional asylum processing centre, possibly in East Timor, as a way to stop boatpeople arrivals.
But the scheme has received little support in Asia and at home, while the opposition has said it would turn the boats back and reopen Pacific island detention centres.
Boatpeople arrivals are tiny by international comparisons and compared with people who overstay visas, but border protection is a "hot button" issue in outer Sydney and Melbourne where population pressures are stretching infrastructure.
Australia's election will be decided on the eastern seaboard, in the most populous states of Queensland, New South Wales and Victoria, where local "bread and butter" issues are expected to determine key marginal seats.
(Editing by Ed Davies and Jonathan Thatcher)
