Australian Election About Money, Not Iraq

From overseas, Australia's (search) federal election on Saturday may look like a referendum on Iraq, with the government pledging to keep troops there and the opposition saying it wants them home by Christmas.

To voters at home, it's mostly about money. Lots of money.

In more than five weeks of campaigning, the conservative coalition of Prime Minister John Howard (search) and his opposition counterpart, Labor Party leader Mark Latham (search), have promised billions of dollars in extra spending on things ranging from hospitals to old-growth forests, high schools to spy schools.

Howard, 65, is seeking a fourth term in office that would make him the country's second longest serving prime minister. Latham, 43, would become Australia's third youngest leader if his party wins.

Iraq is the issue that most clearly divides them. But most of the campaign has been fought around domestic issues such economic management, whose tax cuts will be better and which side can better fund education and the health system.

Polls in recent weeks have shown the government holding a razor-thin lead, but analysts say it is too close to call.

Howard has attacked Latham for lacking experience. Latham in turn has accused Howard of mounting the "most relentlessly dishonest and negative" campaign in Australian history.

But Howard insists his fiscal conservatism is the reason Australia sailed through the Asian economic crisis largely unscathed and has recorded economic growth for every year he has been in office. Inflation and unemployment are low.

It is also the reason he was able to spend billions this year on tax cuts and cash handouts to young families.

Howard's message is: do you want more of the same or to take a gamble on Latham?

"Do they want to continue with the team and the qualities that have given us this strong economy with low interest rates and low debt and high employment and high real wages?" Howard said in an interview this week with The Sydney Morning Herald.

The subtext to the vote is Iraq. The government, a staunch U.S. ally, last year sparked the biggest peace protests in cities across Australia since the Vietnam War when it ordered 2,000 troops to fight alongside American and British invasion forces in Iraq. Labor opposed the war.

Australia still has 900 military personnel in and around Iraq and Howard says they should stay there until Iraqi authorities say they are no longer needed. Latham says the invasion was a mistake, and Australian troops should withdraw.

The difference has led to comparisons with the Spanish election earlier this year which pitted a pro-U.S. government against Socialists who had pledged to pull Spanish troops out of Iraq. In the aftermath of the Madrid train bombings, the Socialists won and immediately pulled the troops out.

Australia's election campaign also was interrupted by a terror blast, though on a far smaller scale — when suicide bombers attacked Canberra's embassy in the Indonesia, killing nine locals.

National security has been a major campaign issue, with both sides pledging to outdo the other to combat the terrorist threat simmering in some of Australia's Southeast Asian neighbors.

The al-Qaida-linked group Jemaah Islamiyah has been blamed for the embassy attack and the 2002 nightclub bombings that killed 202 people on Bali island, including 88 Australians.

Howard this week said he would set up a school for spies to improve counterterrorism intelligence while Latham has said he will establish a U.S.-style department of homeland security.

Latham has not always been a fan of Washington's security policy. Before becoming Labor leader late last year, he described President Bush as "the most incompetent and dangerous president in living history."