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Rudd Inherits Red-Hot Economy

New Aussie PM faces inflationary risks in boom times

By Kevin Spak,  Newser Staff

Posted Nov 26, 2007 2:57 PM CST
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(Newser) – New Aussie PM Kevin Rudd inherits a booming economy, but that doesn't mean it's going to be an easy ride for his center-left government, the Wall Street Journal warns. Demand for Australia's natural resources is feverish and inflation is already uncomfortably high. Rudd has vowed to pump about $48 billion into benefits and tax cuts for Australians, which could seriously overheat the already torrid economy.

He will also face challenges in maintaining the nation's traditionally close ties with the US while distancing himself from some of President Bush's positions; he has said he will withdraw Australia's 550 troops from Iraq and ratify the Kyoto Protocol. A fluent speaker of Mandarin Chinese, Rudd is expected to seek closer ties with China.

Supporters play with a balloon before Australia's new Prime Minister Kevin Rudd delivers his acceptance speech following his victory in the 2007 federal election, in Brisbane, Australia, Saturday, Nov. 24, 2007. (AP Photo/Rob Griffith)
Supporters play with a balloon before Australia's new Prime Minister Kevin Rudd delivers his acceptance speech following his victory in the 2007 federal election, in Brisbane, Australia, Saturday, Nov....   (Associated Press)
Australia's outgoing Prime Minister John Howard waves as he exits the stage after his concession speech following the federal election Saturday, Nov. 24, 2007. Labor Party leader Kevin Rudd swept to power in Australian elections Saturday, ending an 11-year conservative era and promising major changes to policies on global warming...
Australia's outgoing Prime Minister John Howard waves as he exits the stage after his concession speech following the federal election Saturday, Nov. 24, 2007. Labor Party leader Kevin Rudd swept to power...   (Associated Press)
Australia's newly-elected Prime Minister Kevin Rudd reacts to a question from the media during a press conference after winning the federal election in Brisbane, Australia, Sunday, Nov. 25, 2007. (AP Photo/Rob Griffith)
Australia's newly-elected Prime Minister Kevin Rudd reacts to a question from the media during a press conference after winning the federal election in Brisbane, Australia, Sunday, Nov. 25, 2007. (AP...   (Associated Press)
Australia's newly-elected Prime Minister Kevin Rudd gestures during a press conference after winning the federal election in Brisbane, Australia, Sunday, Nov. 25, 2007. (AP Photo/Rob Griffith)
Australia's newly-elected Prime Minister Kevin Rudd gestures during a press conference after winning the federal election in Brisbane, Australia, Sunday, Nov. 25, 2007. (AP Photo/Rob Griffith)   (Associated Press)
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Businesses like Rudd
National Business Review (New Zealand)

Rudd victory scatters Liberals
Age (Aust.)

Fresh political era for Aussies
Christian Science Monitor

Rudd to embrace Kyoto, pull back on Iraq
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