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Australia Sacks Defense Minister in Reshuffle
From the Wall Street Journal of Sun, 21 Dec 2014 05:50:43 EST
Australia's former defense minister David Johnston.
Australia's former defense minister David Johnston. Reuters

SYDNEY—Prime Minister Tony Abbott announced a ministry reshuffle Sunday that included dismissing his defense minister and adding a woman to his cabinet’s inner circle.

The moves come as the conservative prime minister faces a deeply unpopular government and risks losing power after just one term. The new appointments signal renewed efforts to energize Australia’s flagging economy and push legislation through gridlock.

David Johnston ’s dismissal from the defense-minister post comes after a series of missteps and political gaffes. In November, he said he wouldn’t trust government-owned naval shipyard ASC to “build a canoe,” prompting outrage among thousands of workers and a voting backlash in ASC’s home South Australia state. Mr. Abbott defended him after the incident, saying Mr. Johnston only made a “slip of the tongue.”

The move also comes just days before the government is expected to announce the next steps in bidding for a major military contract, as Australia looks to replace and double the size of its aging submarine fleet. Many anticipate the restricted tender process—one of Asia’s biggest military contracts in coming years at 25 billion Australian dollars (US$20.3 billion)—to include competitors from Japan, France, Germany and possibly Sweden.

Mr. Johnston will be succeeded by current Social Services Minister Kevin Andrews, a long-serving official whom Mr. Abbott described as a “very, very safe pair of hands.”

Mr. Abbott also named said Sussan Ley to lead the cabinet’s health and sport portfolios, making her the second woman in his 19-member cabinet after Foreign Affairs Minister Julie Bishop. The appointment comes as Mr. Abbott faced criticism for not having enough women in his senior ministry. Ms. Ley previously served as the assistant education minister.

Mr. Abbott also promoted Immigration Minister Scott Morrison to the cabinet’s top welfare post, signaling his commitment to slash welfare spending next year. Mr. Morrison is one of the cabinet’s toughest-talking ministers, whose hard-line approach toward asylum seekers drew criticism from the United Nations and rights groups. His tack could help Mr. Abbott address obstructive lawmakers in the upper house Senate, where the government lacks a majority and has been unable to pass budget cuts announced in May.

Mr. Morrison’s appointment signals “that this is a government which wants the economy and the budget to be front and center in the coming year,” Mr. Abbott told journalists in Canberra.

The influential Australian Greens party, which holds 10 seats in the upper house, said Mr. Morrison’s appointment shows the government’s intent to pursue policies that will weaken the nation’s social safety net.

The government last week sharply downgraded the country’s fiscal outlook amid slumping global prices for commodities, among Australia’s biggest exports. Mr. Abbott has been forced to defend his government after breaking promises not to raise taxes and pursuing unpopular welfare reforms, among other issues.

Mr. Abbott has faced pressure from within his party to reshape his inner circle or risk losing the government after just one term of office. For months, opinion surveys have shown the conservatives trailing Labor, just two years out from the next national election. A closely watched Newspoll survey ahead of the budget update last week gave Labor opponents of the government a 46% to 54% lead—a reverse of the election outcome last year. Newspoll is partly owned by News Corp, publisher of The Wall Street Journal.

While Mr. Abbott has moved to reshape his team, the ministerial changes—particularly the pick of combative Mr. Morrison—will do little to ease the gridlock that has frustrated the conservative reform agenda since May, when the government unveiled its first budget, which emphasized social-spending curbs.

Finance Minister Mathias Cormann said earlier on Sunday that the government would use next year to try and “achieve consensus” around tax reform, including a possible expansion of the country’s 10% consumption tax. While the move risks alienating voters, economists say it could help recoup plummeting revenues since the end of a resource boom.

Write to Rebecca Thurlow at rebecca.thurlow@wsj.com and Rob Taylor at rob.taylor@wsj.com



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