Australia gets first woman PMAustralia on Thursday appointed its first woman prime minister, Julia Gillard, who vowed to end division over a controversial mining tax, resurrect a carbon trade scheme and call elections within months.
Former prime minister Kevin Rudd made an emotional and ignominious exit, quitting just before the Labor Party was to dump him in a ballot and less than three years after a stunning election victory in 2007.
The Rudd government's dramatic slide in support this year sparked fears within the ruling party of an electoral defeat at a poll expected around October.
"I asked my colleagues to make a leadership change because I believed that a good government was losing its way," Gillard told a news conference.
Centrebet bookmaker made a Gillard Labor government outright favorite to win the next election.
Gillard, 48, immediately offered to end a bitter dispute over a controversial "super profits" mining tax, which is threatening $20 billion worth of investment and has unnerved voters, saying she would throw open the door to fresh negotiations.
But Gillard stood firm on the introduction of a resource tax, stressing that miners should pay more tax and adding in parliament later that miners had conceded they could pay more.
"To reach a consensus, we need to do more than consult, we need to negotiate," she said, adding the government would end its mine tax advertisements.
Miners responded by suspending their multi-million dollar anti-tax advertising campaign.
"We look forward to working with the government in this new way to find a solution that is in the national interest," said a spokesperson for BHP Billiton, the worlds biggest miner.
The Australian dollar briefly jumped after the leadership change, while shares in BHP and Rio Tinto rose around 2 percent, outperforming a flat broad market.
Gillard's takeover will see the government resurrect its failed climate change policy, a carbon trade emissions scheme, with the new prime minister saying she was disappointed in the government's failure to pass laws to set a price on carbon.
"I will re-prosecute the case for a carbon price at home and abroad. I will do that as global economic conditions improve and our economy continues to strengthen," she said.
Greens party leader Senator Bob Brown and institutional investors said they were looking forward to early action on climate change. Rudd postponed his carbon scheme until 2011.
Rudd became the shortest-serving Australian prime minister since 1972, with his leadership falling apart after a string of poor opinion polls.
"I have given my absolute all. I was elected by the Australian people as the prime minister ... to bring back a fair go for all Australians," said Rudd, choking back tears.
Government lawmakers believe Gillard has a better chance of winning back voters because she is a warmer personality who can sell policies more effectively.
Gillard will automatically attract a large female vote, especially when compared with conservative opposition leader Tony Abbott, who is anti-abortion and opposes sex before marriage.
A recent opinion poll showed female voters would ditch Abbott for Gillard, favoring the female leader by a commanding 53 percent to 23 percent for Abbott.
"I was so disappointed when Hillary Clinton didn't become president of the US, so I'm very happy that a woman is in power in Australia," said Anne, a pensioner, in Sydney.
SOFTER TAX, TOUGHER SECURITY
Global miners such as Rio Tinto, BHP and Xstrata are expected to resume their public campaign against the tax at the next election, if it is not changed, helping a resurgent conservative opposition's bid to oust Labor.
"If she is going back to a clean slate that's good news. But we still do not know if she will be negotiable on the 40 percent and other details," said Simon Bennison, chief executive of Australia's Association of Mining and Exploration Companies.
Economic analysts believe Gillard will either water down the tax or offer major concessions to miners.
Rudd's unsuccessful steps to stop boatpeople has angered both voters opposed to asylum seekers and voters demanding a more humanitarian policy, with asylum seekers currently held in detention camps on an offshore island and an outback town.
Gillard is under Labor party pressure to shift from her left-wing position and take a tougher stand on boatpeople. She said she understood Australians were "disturbed" by the number of boat arrivals and pledged strong border protection.
Mandarin-speaking and former diplomat Rudd was a foreign policy expert, but Gillard has little experience on the field and is expected to leave Australia's external relations unchanged, stressing strong ties with both China, the country's largest trade partner, and the United States, its main security ally.
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