In a dramatic turn of events Australia's Prime Minister Kevin Rudd was forced to resign by an internal party leadership challenge and has been replaced by his former Deputy PM Julia Gillard with former Treasurer Wayne Swan as Deputy Prime Minister. Rudd's replacement comes as a shock as he was the principal force behind Labour's landslide election win in November of 2007 when he ousted Conservative Liberal Party Prime Minister John Howard who had been in power for over 10 years. Rudd's demise was due to rapidly declining voter popularity ( he had been Australia's most popular Prime Minister ever only 18 months ago with an approval rating above 70%) and a lack of internal support among the power brokers within the Labour Party itself. The rapid decline in Rudd's popularity was due largely to backtracking on environmental legislation ( the Emissions Trading Scheme) after the failed Copenhagen conference in December 2009 and an illtimed and unwise move to impose a super profits tax on Australia's mining sector, bearing in mind that due to demand from China and other Asian countries the mining sector growth has largely immunised the Australian Economy from the worse aspects of the Global Financial Crisis and  Global recession in Developed countries. Australia is the only OECD Member not to have entered recession and predicted economic growth this year is projected to exceed 3%. Unemployment is a little over 5%.

Federal elections are due in Australia no later than November this year. Julia Gillard will face opposition Liberal Party leader Tony Abbott in this year's elections. Abbott is also relatively new to the conservative Liberal Party's leadership being the third leader of the Liberal Party since their election rout in November 2007. Abbott  won an internal leadership challenge earlier this year against former more moderate leader Malcolm Turnbull.

Report by Greg Stevens; GrestConsult International Business Consultancy