Abbott starts to stem losses

Tony Abbott.

Prime Minister Tony Abbott's Coalition Government continues to trail Labor in the polls as job losses mount, companies struggle in a worsening business climate and the nation grows more nervous at the coming May Budget.

New figures suggest the cost of the swathe of closures and redundancies announced by companies since Abbott won power last September has topped A$600 million ($638 million), adding to an unemployment rate that has already reached 6 per cent.

But there are signs the Prime Minister is beginning to lift both himself and the Government out of the doldrums.

Treasurer Joe Hockey has also indicated that the Budget might not be as ugly as expected. Business has warned that cutting too deep could tip the economy into recession.

His policy of refusing corporate aid, based on the argument that taxpayer handouts only reward bad management and prolong the inevitable, has won support from the news that Victorian canner SPC Ardmore has won a five-year, A$70 million contract with the Woolworths supermarket chain.

Owned by Coca-Cola Amatil, the company was refused A$25 million in federal aid, and instead received A$22 million in support from the state Government.

The company's problems spurred a huge "buy Australian" surge from consumers, pushing up sales by 60 per cent in Woolworths alone, and its new contract has been portrayed as a vindication of Abbott's policy.

But similar refusal to help ailing companies, including the car industry and Qantas, has hit hard.

Research by the Parliamentary Library found that the costs of closures announced since the September election could reach A$616 million in additional unemployment payments and lost income tax, with further blows to federal revenue likely to follow.

But Abbott appears to be clawing his way back from the series of polls that have shown a Labor lead since late last year.

The latest Newspoll published in the Australian yesterday said that Labor's lead had shrunk from 54-46 per cent to 51-49 per cent in the two-party preferred vote that decides Australian elections.