Conservative Prime Minister Malcolm Fraser dissolved parliament yesterday and called a sudden early general election for March 5 in a bid for three more years of power.
He called the election on the issue of union power, charging that the opposition Labor Party and its allies in the trade union movement were trying to smash his recently announced freeze on wages.
But the bid by Fraser, whose political skills have kept him firmly at the helm in Canberra for seven years, could backfire. Less than an hour after the election was called, the labor party leader, Bill Hayden, announced he was resigning. He is to be replaced with the nation's most popular political figure, Robert James Lee Hawke.
Fraser said in calling the early election he had taken account of the probability that labor would drop Hayden. But most observers believed that he decided to go to the polls believing Hayden would be his opponent and that he would have an easy win.
Recent opinion polls have shown Labor ahead of Fraser's conservative coalition, consisting of Fraser's Liberal Party and the rural National Party, by about 4 percent.
Traditionally, the conservatives make gains during a campaign but Hawke could change the pattern and pose the first serious threat to Fraser. He was swept into power in 1975 after the last Labor government, led by Gough Whitlam, was sacked by the governor general during a constitutional crisis. The Senate was refusing to grant funds to the government.
Hawke, 53, has never been a doctrinaire politician and is opposed by the Socialist-leftist factions of the Labor Party. He was the president of Australia's equivalent of the AFL-CIO for 10 years before he entered Parliament at the 1980 elections.
His rise to leader of his party in just over two years would be unprecedented here. A charismatic orator with an immense following among blue-collar workers and middle-class women, Hawke has consistently won opinion polls in recent years asking who was Australians' most popular political figure.
A graduate in economics from Oxford University, Hawke achieved an entry in the Guiness Book of Records by downing two pints of beer in 12 seconds. Hawke declared his intention of becoming prime minister three years ago, when he also swore not to drink again.
The election is being held nearly 12 months early, at a time when Australia is suffering its most severe economic recession since the 1930s. Unemployment has reached a record 9.5 percent. Inflation is running at 11 percent.
Fraser imposed the wage freeze in December. It is compulsory for all federal and most state public servants. The Arbitration Commission, which has the power to recommend settlement of industrial disputes and fix wages in the private sector, has agreed to refuse wage increases until July 1 and then to consider Fraser's demand that the freeze continue for a full 12 months.
But there is no law to force the wage freeze in the private sector. The trade union movement has refused to accept it, saying there should be a freeze on prices as well--which Fraser refused to impose. Labor has initiated an industrial campaign to break the freeze and win pay increases at least equal to the inflation rate.
Just before Fraser called the election, the powerful unions in the oil industry decided to strike for pay increases and closed half the refineries in the country. There was only a week's supply of fuel on hand and rationing would have had to be imposed, at least in the major cities, within days. It was this action that triggered Fraser's decision to call the election. Today, under pressure from Hawke, the oil unions abandoned the campaign. Management of the ailing economy is expected to be a central issue in the campaign. Fraser's wage freeze is the core of his policy. Despite seven years of supporting a tight monetarist policy, Fraser has suddenly let the budget deficit balloon.
New programs to build roads, update airports and shipping facilities, support drought-stricken farmers and build giant dams across the country--all announced in the past three months--are costing more than $4 billion. The budget deficit in the current fiscal year is now expected to be about $6 billion, four times the amount budgeted.
Labor has been negotiating with the unions to sign a prices and incomes policy, based on the social contract of Britain in the early 1970s. But no agreement has been reached so far and Labor is facing the prospect of campaigning without a central economic policy other than the one already stolen by Fraser--to expand the federal deficit.