Tax Reform Re-Elects Aussie PM

Prime Minister John Howard's conservative government won re-election Saturday in Australia, claiming a mandate to reform the nation's tax system despite a diminished majority in Parliament, national media said.

But Howard can take only limited comfort from the victory, with voters deserting his governing coalition in droves to opposition parties that may yet have the power to alter his tax plan.

With 70 percent of the vote counted, analysts said the main opposition Labor Party had won a big haul of votes away from the government, but not enough to deliver them a majority in Parliament's House of Representatives.

"It is clear that the (conservative) coalition will have a working majority in the new Parliament," Howard told jubilant supporters in Sydney. "I want first and foremost to thank the Australian people for returning the government."

Labor leader Kim Beazley appeared before his own backers, who cheered the party's gains, to say: "I think a win by us is unlikely."

The conservatives held off a strong challenge from the far right-wing One Nation party, which attracted about 8 percent of the national vote.

One Nation leader Pauline Hanson, who exploded onto the political scene about 18 months ago with proposals to freeze Asian immigration and cut welfare programs specifically targeting Aborigines, appeared not to have been re-elected, calling into question the party's future.

About 12 million registered voters cast their ballots at thousands of polling booths in public buildings, from the nation's desert Outback to its tropical north and in its modern, bustling cities in the southeast.

Howard staked his government's fate on what he calls "economically radical" tax reforms simplifying an antiquated tax structure that has built up since the 1930s. The centerpiece of the plan is a 10 percent tax on all goods and services, which voters rejected outright in a 1993 election.

The plan appealed to Ian Montcrieff, a 73-year-old self-funded retiree who said Howard was taking a "brave approach."

"I'm very keen for the tax reforms to come through," Montcrieff said in Sydney.

But Chris Ireland opposed the tax and supported Labor. "I don't like any of (the parties) but I don't want a (goods and serices tax)," the 30-year-old Sydney voter said.

Beazley used a "no tax" promise to pull Labor close to victory. The party lost its majority in Howard's landslide victory in 1996.

With the historical odds against him, Beazley led Labor to a strong recovery, probably capturing 16 of the 27 seats the party needed for outright victory, according to detailed computer analysis by the Australian Broadcasting Corp., using vote counts provided by the official Australian Election Commission.

The broadcaster feeds results into its computer as they are counted officially, giving an almost real-time result on an electorate-by-electorate basis.

A final official outcome in all electorates may not be known for days, but the ABC computer was predicting a conservative victory by eight seats down from the 41-seat majority it held going into the election.

Even if Howard retains control in the House of Representatives, where government is formed, polls have indicated minor parties or independents again will hold the balance of power in the upper house, meaning the government may have to negotiate to get bills passed.

The domestic news service Australian Associated Press also predicted a conservative victory, but with a much diminished majority.

Labor needed to hold all its current electorates and win 27 more to seize a majority in the House of Representatives, the more powerful chamber in Australia's bicameral Parliament.

Labor and the coalition had been in a dead heat for weeks, according to the polls.

Written by Rohan Sullivan