Petrol fuels political woes for Australia's Rudd

By James Grubel

CANBERRA (Reuters) - Rising petrol prices have ended Australian Prime Minister Kevin Rudd's political honeymoon after 6 months in office, with commentators warning his Labor government may now be vulnerable at the next election.

Although the next election is almost 3 years away, and Labor only swept into office last November, cracks in Rudd's handling of rising petrol prices have prompted warnings his government may wilt.

Veteran political journalist Rob Chalmers, who publishes a political newsletter in Canberra, said a series of cabinet leaks on petrol had damaged Rudd and given new hope to the conservative opposition Liberal Party for the next election.

"This week has the worst week for his government since the election," Chalmers said. "It is time for a rethink of the generally held view...that Labor is most likely to win the next election. Suddenly this seems out of date."

Rudd had been politically untouchable since becoming Labor leader 18 months ago and began his term in office with widespread praise for two major policy changes, signing the Kyoto Protocol and apologizing to Aborigines for past injustices.

But leaked cabinet documents critical of his plan to tackle rising petrol prices at the bowser, by establishing a "Fuel Watch" monitoring system, rattled Rudd last week as he tried to defend his scheme.

Newspaper headlines read: "Rudd stumbles on cost of living", "Now Rudd pays the price", "Rudd low on fuel" and "Rudd, the lion who squeaked".

Rudd has said he expects to take a hammering in opinion polls after the leaked documents. Rudd's personal popularity is around 70 percent and his government's support about five points higher than the election result.  Continued...