By James Grubel
CANBERRA (Reuters) - Australia faces a possible fourth straight year of political instability after opposition leader Tony Abbott, on track to win power in a September election, threatened a second poll if a hostile upper house rejects his plan to scrap a tax on carbon.
One day after Prime Minister Julia Gillard surprised voters by announcing a September 14 election, Abbott on Thursday promised to scrap a carbon tax if he wins office, but added he would call a second election if a hostile Senate rejected his plans.
"If it takes a double dissolution to do it, I won't hesitate to have one," conservative leader Abbott told the National Press Club in Canberra, referring to the dissolution of both houses of parliament which would mean another election.
Even if Abbott wins a September election, the Greens and Labor will control a majority in the Senate until at least July 2014, and possibly until 2017. A second election of both houses in 2014 could give him the Senate numbers to abolish the carbon tax, or to ensure a joint sitting of both houses to repeal it.
Australia has endured three years of political instability with Gillard's minority Labor government relying on a handful of independents and Greens to command a one-seat majority and pass legislation.
"Most Australians perceive that it's been a difficult few years and the prospect of dragging this (political instability) on beyond September this year would be unfortunate," said Hans Kunnen, chief economist at St. George Bank.
"One would wish for more stability, but it's not a deal killer. Business has to go on and you live with the environment that you have."
With the next election eight months away, opinion polls show Abbott is on track for an easy victory, with Gillard's Labor set to lose up to 18 seats. Abbott only needs to win two government-held seats to win power.
But Abbott has one big problem, a seemingly entrenched disapproval rating, which was at 58 percent in January. Gillard is also disliked by voters, with a disapproval rating of 49 percent, but Gillard leads Abbott as preferred prime minister.
Australia's mandatory voting system will mean both will have to convince disillusioned voters of not only their policies, but that they are also the best person to lead the nation.
FAMILY MAN IMAGE
Abbott has campaigned tirelessly against the A$23/metric ton (1.1023 tons) ($24/metric ton) carbon tax since 2010 and has made its abolition his key election promise, alongside a promise to scrap a 30 percent tax on iron ore and coal mine profits.
Abbott repeated his promises to deliver budget surpluses, strengthen economic growth, and stop the flow of asylum seekers who come to Australia by boat from Indonesia, although he gave no details of his policies.
On foreign policy, both Abbott and Gillard firmly support greater involvement with China, the country's biggest trade partner, and close defense ties with the United States.
In his National Press Club speech designed to kick off his election year, Abbott, 55, a former Rhodes scholar who was a member of the Oxford boxing team, painted himself as a man of the people, highlighting his family life, his love of cycling, and work with a volunteer fire brigade and surf clubs.
The super-fit Abbott has reinforced his action-man image over the Australian summer fighting wildfires, and has been photographed with his wife and daughters, in contrast to Gillard who is not married and has no children.
Gillard set the September 14 election date in a bid to shift the focus to Abbott's policies and end uncertainty over her ability to hold the minority government together in 2013.
Gillard said she would dissolve parliament on August 12, but with a long winter recess, parliament will rise for the last time before the election on June 27 -- leaving Gillard with only five months to pass any legislation and for her minority government to survive any motions of no confidence.
But her government suffered a fresh setback on Thursday when a suspended Labor politician, who still supports Gillard's government as an independent, was arrested over 150 fraud charges related to spending union money on travel, entertainment and prostitutes. His lawyers said he would plead not guilty.
The ongoing scandal over Craig Thomson is unlikely to hurt Gillard's ability to control a majority in parliament, although she may need more independents on controversial bills.
If convicted, Thomson could be forced out of parliament, although the legal processes are unlikely to conclude before parliament rises for the last time before elections.
($1 = 0.9591 Australian dollars)
(Editing by Michael Perry and Robert Birsel)
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