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C O N F I D E N T I A L SECTION 01 OF 02 CANBERRA 001671 
 
SIPDIS 
 
NOFORN 
SIPDIS 
 
E.O. 12958: DECL: 11/20/2017 
TAGS: PGOV PREL AS
SUBJECT: OPPOSITION LABOR PARTY SET TO WIN AUSTRALIAN 
ELECTION 
 
 
Classified By: James F. Cole for reasons 1.4 (b) and (d) 
 
¶1. (C/NF) SUMMARY: Absent a sudden, highly unlikely 
turnaround, the Kevin Rudd-led Australian Labor Party (ALP) 
will win the Australian federal election on November 24. 
Although there has been a small shift towards the Coalition 
since the campaign started, the ALP appears headed to win an 
additional 20-25 seats in the federal parliament, giving it a 
10-20 seat majority in the 150-member House of 
Representatives.  While this would be a narrow parliamentary 
majority, it would represent a decisive election victory. 
While the ALP has run an almost perfect campaign with the 
popular Rudd its centerpiece, the key to its likely victory 
will have been the sentiment among the Australian people that 
after 11 years under John Howard, it is time for a change in 
leadership.  END SUMMARY 
 
WHERE THE ALP WILL WIN 
 
¶2. (C/NF) The ALP, which currently holds 60 seats in the 
150-seat parliament, requires a net gain of 16 seats to form 
a majority government.  Our analysis of each state indicates 
that the ALP will gain two seats in Tasmania, three in South 
Australia, one in Victoria, one in the Northern Territory, 
six in New South Wales, and six in Queensland - a 19 seat 
gain.  There are also several seats in the "danger zone" - 
the Coalition is in front but the polls are close.  Some of 
these could also fall to the ALP, which could push its total 
toward 25 seats, perhaps even higher. 
 
COULD THE COALITION HOLD ON? 
 
¶3. (C/NF) The Howard government could hold on to power if it 
is able to keep it's share of the two-party vote at 48 
percent or higher, defend some of its marginal seats in 
Queensland and New South Wales, not lose any seats in 
Victoria, and perhaps pick up a seat in Western Australia. 
For this to happen, however, the Coalition would need some 
good luck and some event that would make the public think 
twice about a change.  Under this scenario, the ALP's 
two-party vote could be no higher than 52 percent. 
Unfortunately for the Howard Government, however, the ALP's 
vote has averaged 54 percent in the polls since Rudd became 
Opposition Leader last December. 
 
POLLS AND BETTORS POINT TO COALITION DOOM 
 
¶4. (SBU) The last change of government was in 1996 when there 
was a 5.3 percent swing to the Coalition. For the 
Coalition, there are ominous parallels with that election. 
In the year preceding both elections, the Opposition 
maintained a significant lead in the polls: around 54-46. 
During the 1996 campaign, the Newspoll conducted a week 
before the election had the Opposition leading with 54 
percent of the two-party vote - the same figure for the 
corresponding Newspoll in 2007.  In a fanatical gambling 
nation, the punters are also betting heavily on a Labor 
victory.  There are three betting agencies in Australia that 
accept bets on the election.  In 81 of the 150 seats, the ALP 
has a win probability of greater than 50 percent.  As of 
November 21, the three-agency average probability of a Labor 
win was 77 percent. 
 
ALP WINS CAMPAIGN, TOO MUCH BAGGAGE FOR HOWARD 
 
¶5. (SBU) The Coalition's campaign has never gained momentum. 
Using the slogan "Go for Growth", the Coalition started with 
QUsing the slogan "Go for Growth", the Coalition started with 
all guns blazing by announcing a big tax cut.  However, the 
middle weeks of the campaign were dominated by the lead up 
to, and fallout from, a November 7 interest rate rise. 
Howard won the 2004 election largely on a promise to keep 
interest rates low.  The 25 basis-point increase during the 
election campaign gave the ALP ammunition to undermine the 
Coalition on the economy, it's strongest issue, by reminding 
voters that interest rates have risen six times since the 
last election.  In the context of the economic management 
debate, a second key was the ALP campaign launch in which 
Rudd boosted his credentials as an "economic conservative" by 
limiting his campaign promises that day to only one quarter 
of the cost of Howard's. 
 
 
CANBERRA 00001671  002 OF 002 
 
 
¶6. (SBU) As has been the case all year, Howard has been 
weighed down by the baggage of eleven years in office, an 
unpopular workplace relations reform, and his image as a 
leader who has passed his prime.  Howard's stated intention 
to retire midway through his next term and hand the Prime 
Ministership to the not-as-popular Treasurer Peter Costello 
has been ruthlessly exploited by the ALP as further evidence 
that Howard is not the man for the "future." 
 
SENATE COULD BE A PROBLEM FOR RUDD 
 
¶7. (SBU) The Coalition will likely lose its Senate majority 
following the simultaneous half-Senate election.  The 
Coalition currently holds 39 seats in the 76 seat chamber. 
The ALP holds 28 seats, the Green Party four, the Democrats 
four and Family First one seat.  There are 40 Senate spots 
being contested - 6 from each state and two from each 
Territory (Territory Senators' terms are concurrent with 
those of the House of Representatives).  While newly-elected 
Senators take their places in July 2008, new territory 
Senators take their seats as soon as the poll becomes 
official.  With the Green Party in a good position to win a 
seat from the Liberals in the Australian Capital Territory, 
the Coalition could lose its control of the Senate virtually 
immediately.  Even if this occurs, however, the Coalition 
would have 38 seats until July 2008, giving it the power to 
block a Rudd government from implementing its program.   The 
make up of the Senate is difficult to predict at this 
juncture but it is feasible that the Coalition will lose at 
least two seats in the Senate and that the ALP will be 
reliant on the minor parties and independents, particularly 
the Green Party, to implement its legislative program. 
 
RUDD WILL SET A PRECEDENT 
 
¶8. (SBU) COMMENT: Rudd has shattered conventional political 
wisdom.  When he became leader just under a year ago, the 
general consensus was that he could not win the election 
because a) he would not have time to become "known" by 
voters; b) winning 16 seats was an insurmountable task; c) 
economic conditions were buoyant; and d) his "honeymoon" 
period as new leader would fade by the middle of the year. 
If Rudd wins, he will have done so with the help of a massive 
advertising campaign by the unions.  The trade union 
movement, knowing that Howard's workplace reforms would 
hasten its demise, bet everything it had on beating John 
Howard.  During this campaign the unions and the left-wing of 
the Labor Party have kept quiet and allowed Rudd to sell an 
essentially conservative ALP program.  If Rudd wins, we would 
expect the unions and the Labor left-wing to become much more 
assertive in pushing their agendas. 
 
MCCALLUM