Australian Prime Minister Kevin Rudd faced his first political crisis since taking office when his defense minister resigned yesterday over travel and lobbying activities involving family and friends.
The development is a blow to Rudd because outgoing Defense Minister Joel Fitzgibbon was a factional supporter and senior minister from the most populous New South Wales state, a key to winning national elections.
But the controversy surrounding Fitzgibbon, who was portrayed as politically clumsy, had prompted a series of damaging headlines, and analyst Nick Economou said his resignation would allow Rudd to draw a line under the affair and so keep open the option of an early election late this year or early next year.
“I suspect Rudd is thinking seriously about an early election, they needed to clear the decks and Fitzgibbon had to go,” said Economou, from Melbourne’s Monash University. “There was more and more coming out about Fitzgibbon, which was hurting him and hurting the government.”
The political crisis comes a day after Rudd and Australian Treasurer Wayne Swan took credit for Australia avoiding slipping into a technical recession, defined as two consecutive quarters of economic contraction, thanks to more than A$52 billion (US$42 billion) in economic stimulus since last October.
Fitzgibbon’s resignation would stall the political gains from the good economic news, but in the longer term would not harm Rudd’s high standing in opinion polls, Economou said.
The resignation gives Rudd the option of reshuffling his Cabinet, although he would only say he would announce a replacement defense minister soon.
Possible replacements include former union leader Greg Combet, currently a junior climate change minister, another former union boss Bill Shorten, or veteran minister John Faulkner, currently Rudd’s Special Minister of State.
Rudd said Fitzgibbon had paid a high price for mistakes he made in disclosing travel and gifts, and for a potential business conflict involving his brother and the Defense Department.
“Obviously I feel sad about this, but it’s important that we maintain high standards of ministerial accountability. That’s why I believe the minister has acted appropriately,” Rudd said.
As defense minister, Fitzgibbon oversaw the withdrawal of Australian combat forces from Iraq and the development of a new defense strategy for Australia for the next 20 years, including plans to buy new ships, planes and submarines.
But Fitzgibbon has been targeted by the conservative opposition since early this year for failing to properly disclose trips to China, taken before he was a minister, paid for by a Chinese-born family friend with close ties to Beijing.
Fitzgibbon earlier this week told parliament he also failed to disclose the cost of a night in a hotel, paid for by health insurance company NIB Holdings, run by his brother.
But his resignation came after it was disclosed Fitzgibbon’s ministerial office was involved in meetings between his brother’s company and his own defense department.
“To protect the integrity of the government, I have decided to resign as a member of the executive, effective immediately,” Fitzgibbon said in his letter of resignation.
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