Australia PM warns party of rising job queues ahead poll

Australian Prime Minister Kevin Rudd on Thursday warned his ruling Labor party of the political risk of rising unemployment ahead of the next election due in 2010, despite the economy rebounding from the global downturn. Australia's commodities-fuelled economy has avoided the worst of the financial crisis, and has so far escaped a recession, but rising job queues loom as possibly Rudd's biggest electoral risk. "The road to recovery will be long, hard and uneven, with many twists and turns. Unemployment will continue to rise for some time to come," Rudd said in an opening speech at the Australian Labor Party's national conference in Sydney. Just before the conference opened, Treasurer Wayne Swan said that while the economy still needs some stimulus, the government has to be firm in framing its next two budgets. Rudd, who came to power in 2007 and dominantes opinion polls, is due to face voters in late 2010, but may call a snap poll earlier in the year with his conservative opponents divided. Rudd thanked the party grassroots and union leaders for bringing Labor out of the political wilderness in 2007, but reminded them that Labor had been in government for only 35 of the past 108 years. "These figures should be the cause for sober reflection for us all," said Rudd, adding he now wanted his government to be reformist government for the long term. A handful of protesters, including a scantily clad mermaid, and nurses who want more health spending, met the 400 Labor delegates as they arrived for the three-day policy-making conference, the first for Labor in power since 1995. Labor's union backers had warned of major fights at the three-day Sydney conference, with two powerful unions demanding priority for Australian companies in government contracts. But the government headed off the possible row by setting up a new procurement body, consistent with World Trade Organization rules, to help Australian firms bid for government contracts but without giving Australian firms any preferential treatment. JOBS, JOBS, JOBS Rudd said his government would keep a tight rein on spending as the economy recovers, to return the budget to surplus. The government has announced A$52 billion ($43 billion) in direct economic stimulus in the past year to buffer the economy from the global downturn. The Australian economy dodged recession and expanded 0.4 percent in the first quarter as the best trade performance in 48 years helped offset a slump in business and housing investment. But Rudd said many Australians would still lose their jobs over the coming year, while many school-leavers would struggle to find their first jobs. Economists have said they do not expect rising joblessness to be as bad as the government has forecast. Rudd used the Labor conference to announce a new initiative, to create 50,000 new "Green jobs", including a green training scheme for long term unemployed youths. Treasurer Wayne Swan said he would also use the Labor conference to focus on the need to support jobs. "What I'll be talking about is what we have to do to support employment in the Australian economy," Swan told reporters. "I'll be talking about nation building for recovery, the employment challenge that we face, why economic stimulus is important, and why economic stimulus must be maintained." Swan said the 2010 budget would still be tough on spending, even if Australian and international economies are rebounding. "As the international economy begins to recover, we know we have to be quite firm with our budget as we go through next year and the year after," he said. Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here .