Call for government unity as Australian PM faces critical budget, election

Australian Prime Minister Malcolm Turnbull speaks during a joint news conference with New Zealand Prime Minister John Key (not pictured) in Sydney February 19, 2016.

Reuters/Jason Reed


SYDNEY Australia's deputy leader called for government unity on Thursday as Prime Minister Malcolm Turnbull's polls plummet amid party divisions and ahead of a critical budget and looming election later this year.


Deputy Prime Minister Barnaby Joyce said the honeymoon was over for Turnbull, who became leader in a party room coup in late 2015 and is now under pressure on several policy fronts and facing party instability blamed on the man he toppled, former prime minister Tony Abbott.


"I think we've got to all get to get together as one, we've got to go to the election unified there will be an election this year," Joyce told reporters in Canberra.


"Quite obviously honeymoons don't go on forever," Joyce said of Turnbull's leadership.


Turnbull's conservative Liberal government was on course to for an easy election victory, but polls have tightened in early 2016 and a tie with opposition Labor is a now possibility according to a Newspoll last week.


Turnbull's ascension last September was seen as possibly ending an era of political instability in Australia, with five prime ministers in eight years.


But political analysts say the multi-millionaire former tech entrepreneur needs a decisive election victory to quell ongoing dissension within his Liberal party.


An election is due by January 2017, but Turnbull who does not control the upper house Senate has hinted he may go to the polls early, within five months, in the hope a new Senate will present an easier path for legislation.


Critical for an election victory is Turnbull's first budget due in May, but the end of a decades-plus mining boom in resource-rich Australia and plummeting commodity prices has left the government struggling to raise revenue.


In December, Australia forecast its budget deficit would swell to A$37.4 billion ($27.32 billion) in the year to June.


Government spending has increasingly become an area of division within Turnbull's Liberal party. He has been forced to rule out changes to several revenue raising policies, including negative gearing, which allows property investors to write off losses against taxable income, and a rise in a consumption tax.


The right wing of Turnbull's government, with rival Abbott as its de facto leader, maintains a need to reduce spending, amid a so-called "budget emergency".


"Abbott seems intent on undermining Turnbull," said John Uhr, Director, Centre for the Study of Australian Politics, Australian National University.


($1 = 1.3687 Australian dollars)


(Reporting by Colin Packham; Editing by Michael Perry)