Crisis Not Hurting Australia PM After 1 Year-Poll

The Reserve Bank of Australia has cut its key interest rate by 2 percentage points to 5.25 percent since September.

Financial unrest and recession fears are reinforcing the appeal of Australia's government, with Prime Minister Kevin Rudd's popularity at near-record levels a year after his election, a leading poll showed on Monday.

Rudd, 51, continues to defy warnings by political analysts that the global financial crisis could unseat his centre-left government in 2010 after one three-year term, with a poll in The Australian newspaper showing his popularity on the rise.

Support for Rudd's Labor was at 55 percent, 10 points clear of his conservative rivals when votes were distributed among the two major parties. Voter backing for Rudd as leader was at 63 percent, the closely watched Newspoll said.

The onset of the financial crisis and the early unveiling by the government of a A$10.4 billion ($6.5 billion) economic stimulus package targeting families and pensioners has helped Rudd shake off accusations he is bureaucratic and indecisive.

After early praise for ratifying the Kyoto climate pact and apologising to Aborigines for past injustices, Rudd has been widely pilloried at home for referring difficult decisions on carbon trade and pensions to review panels and committees. "When the going got tough, Kevin Rudd's star shone brighter with voters, giving him a winner's glow at the end of his first year as PM," wrote political commentator Phillip Coorey in The Sydney Morning Herald newspaper.

When Rudd's government was elected, Newspoll had support for Labor at 52.7 percent against 47.3 percent for the conservatives.

The conservatives are still reeling from a ballot box trouncing that even saw veteran prime minister John Howard lose his Sydney-based seat.

Leading economic forecaster Access Economics said the biggest danger for the government would be the end of successive budget surpluses. Access Economics expects a A$1 billion deficit next fiscal year, rising to A$4 billion for the following two years.

Deficit spending is politically risky in Australia, with voters equating a national surplus to economic responsibility. The latest Newspoll survey showed 56 percent of people would be concerned if the budget dipped into the red.

"The official forecasts ... are for modest growth and modest surpluses, but there are always differences when there are private sector forecasters out there," Treasurer Wayne Swan said.

The government earlier this month slashed the forecast budget surplus by three-quarters and tipped economic growth would halve to around 2 percent, while unemployment would also climb to 5.75 percent by 2010 from 4.2 percent currently. Rudd has refused to talk about pushing the 2008-09 budget into deficit, although the independent central bank last week said spending could help avert a mild recession.

The Reserve Bank of Australia has cut its key interest rate by 2 percentage points to 5.25 percent since September. Investors are pricing in a 100-basis points rate cut next week.

Opposition Leader Malcolm Turnbull said the government had failed because it had not delivered on key promises to reform education and give every high school student a computer, as well as roll out a national high-speed broadband network.

Swan said the government had never promised to meet all its commitments in its first year.