Shares in Australia’s trading floor went up 0.7 percent in the opening session this morning, led by the raise of mining stocks after Prime Minister Kevin Rudd replaced by his deputy. It breathes hope a deal can be reached regarding the new tax package proposed by the government. Global stocks BHP Billiton and Rio Tintu jumped 2 percent and Fortescue Metals Group grew 2.5 percent.
Julia Gillard becomes Australia’s first woman Prime Minister this morning when Kevin Rudd finally retreated, so the Labor Party government to find a way to anticipate the defeat in elections later this year by replacing its leaders. Gillard estimated would bring more changes in leadership style rather than substance. But investors hoping he would be more lenient on a controversial mining tax plan is “super profitable”, which threatens an investment property worth $ 20 billion in Australia and has been troubling the electorate.
“If they bothered to put new leaders to get their chance again in the next general election, then obviously they will facilitate and mining taxes – all part of a strategy to shore up voter support,” said Mark Taylor, senior analyst of natural resources on Morningstar Daily.
A new leader Julia Gillard will lead the government until elections due within the next few months. Gillard got 112 votes in the Labor Party meeting on Thursday, hours after the uprising against Mr. Rudd. Rudd did not even nominate them selves for reappointment in the vote on Thursday – a signal that he knows support for him has collapsed. Because he is the leader of the majority party in Parliament, the appointment as Prime Minister Gillard is just a formality. Gillard is not possible to change the position of Australia’s key foreign policy such as the commitment of troops to Afghanistan. Rudd won the election less than three years ago but its support dropped significantly in the polls recently.