Australian Prime Minister Kevin Rudd faces a political showdown over the next week as he tries to pass crucial laws through a hostile Senate, with polls showing cracks in his support and analysts pondering the likelihood of an early election. The opposition-dominated Senate has flexed its powers by blocking Rudd's $23 billion fund to support commercial property projects, and now has its sights on scuttling Rudd's plan to introduce emissions trading from mid 2011. The showdown with the obstructive upper house parliamentary Senate on the emissions trading laws will reach its climax next week and give a clearer view on whether Rudd will consider an early election later this year or in early 2010. “The strategists are probably thinking now there are no electoral gains to be had from an early double-dissolution election, so I think that's off the agenda,” analyst Nick Economou from Monash University told Reuters on Wednesday. He said he expected Rudd would now aim to run his full three-year term and call elections in late 2010, using the defeat of emissions trade laws as a campaign weapon against the opposition. Compounding Rudd's problems, opinion polls are showing support for the opposition starting to rebound for the first time since they lost power in November 2007, although Rudd remains well ahead. The polls show opposition leader Malcolm Turnbull's campaign against record levels of government debt may be gaining traction, lifting the spirits on the opposition benches and raising hopes the party may be competitive at the next election. At the same time, Turnbull has been bolstered by the decision of former treasurer Peter Costello to retire at the next election, ending ongoing speculation he might be challenged for the Liberal Party leadership. Costello's move took Rudd by surprise, and will force Labor strategists to rethink their plan to highlight leadership divisions within the opposition ahead of the next election – a move Economou said would further sway Rudd against going early. Election tactics Rudd needs an extra seven votes to pass laws through the Senate, which has a backlog of bills it needs to pass in the next five sitting days, including laws for renewable energy targets and the contentious emissions trading laws. A pointer to election considerations is a relatively minor bill to increase taxes on fizzy alcoholic drinks. That bill has been defeated once, and will give Rudd an election trigger if it is rejected a second time in the next week. The opposition, which wants to avoid an early election until the opinion polls improve, may back down and allow that bill to pass in a tactical move designed to limit Rudd's options. But the government appears to have no chance of passing the emissions trading laws by its deadline of the end of June, with the five Greens senators and two independents, as well as the Liberals, all opposed to the package of 11 bills. Under the constitution, the government can call an early double-dissolution election, of the full Senate and all 150 lower house seats, if the Senate rejects a bill twice with an interval of at least three months between votes. That would mean Rudd could re-submit the emissions trade laws in early October, and could have a trigger for an early poll in December or early 2010 if the laws were defeated a second time. Economou said with the economy suffering due to the global downturn, the government appeared ready to see the emissions laws defeated and would use it as a political weapon against Turnbull at an election late in 2010. “They're not trying. I think they are quite sanguine about the bill being defeated in the Senate. That will give them the luxury of not having to do anything on it, and say it is all the fault of the opposition,” he said.
