Shock win sets stage for war

CANBERRA - Tony Abbott has put Australian politics on a war footing after winning leadership of the Opposition in a victory that stunned the nation.

Abbott yesterday beat former leader Malcolm Turnbull by one vote to become the Liberal Party's 13th leader and put the Opposition on an immediate collision course with Prime Minister Kevin Rudd.

The bitter leadership contest spelled the likely doom of Rudd's greenhouse emissions trading scheme, the key element of Labor's climate change policy, with Abbott's victory swinging the previously closely divided party to a 55-29 rejection of the deal Turnbull had brokered with the Government.

The Opposition will now vote to defer the bill for a Senate inquiry, frustrating the Government's insistence that it be passed this week in time for Rudd to take it with him to the Copenhagen climate change summit.

If the Senate refuses to delay the legislation, the Opposition will vote to kill it by the end of the week - now almost a foregone conclusion with the Greens also refusing deferment and Family First Senator Steven Fielding attaching impossible demands for his support.

This would be the second rejection by the Senate of the ETS legislation, handing Rudd the trigger he needs to dissolve both Houses of Parliament and call an early election that opinion polls and most analysts predict would crush the Opposition.

Rudd has said he has no intention of calling an early poll, but speculation remains high that with his present ascendancy and with Abbott at the helm of a divided Opposition, the Government may decide to strike.

Abbott, who also foreshadowed a new industrial policy shifting back towards the open-market approach of former Prime Minister John Howard's conservative Administration, said yesterday that he was ready for a fight.

"As [Opposition] leader I am not frightened of an election and I am not frightened of an election on this [climate change] issue," he said.

"As far as many, many millions of Australians are concerned, what the Rudd Government ETS looks like is a great big tax to create a great big slush fund to provide politicised handouts, run by a giant bureaucracy.

"This is going to be a tough fight, but it will be a fight.

"It will be a good contest, it will be a clean contest, and I know that my colleagues are gearing up for the fight of their lives."

Abbott is also moving to shift the Liberals toward a new set of conservative policies, distinguishing the Opposition from the blurred centre to which both sides of politics have steadily gravitated.

"The job of an Opposition is to be an alternative, not an echo, to provide a choice, not a copy," he said.

Central to its campaign will be climate change, the Government's high ground and for which Rudd will seek a renewed mandate at the polls.

Assistant Climate Change Minister Greg Combet, describing the Opposition as conspiracy theorists and climate change deniers, said the Opposition wanted to block action.

"Any talk by such people as [climate change sceptic, Liberal Senator] Nick Minchin or Mr Abbott, or anyone in that camp, about deferral for further consideration is not to be believed," he said.

Abbott said he believed climate change was real and humans did make a contribution, but that the extent of that contribution and the measures needed were in dispute, as were the merits of an ETS.

"We will have a strong and effective climate change policy, but one thing we are not going to do is damage Australia's export industries, put ourselves at a competitive disadvantage against the world, and we are not going to have the conceit of thinking we can save the world on our own."

Abbott's victory over the moderate Turnbull and leftist Joe Hockey has given the conservatives the upper hand in the Opposition, demonstrated by the large swing away from support for the ETS in an unprecedented secret ballot on the policy after the leadership vote.

Abbott plunged the party into chaos last week when he switched support from Turnbull and the ETS, resigned from the shadow ministry, gave notice of a challenge and precipitated an avalanche of similar desertions.

He had originally intended to stand aside if Hockey, the popular shadow treasurer, could be convinced to stand.

Hockey - widely considered the favourite - refused to challenge his friend Turnbull, but late on Monday said if Abbott supporters would agree to a free vote on the ETS he would stand.

Abbott rejected the proposal and forced a three-way fight.

Despite his popularity, Hockey's bid to work around the ETS impasse by proposing a free vote was seen as a cop-out, undermining his credibility and destroying his chances of becoming leader in the first round.

"Over the past few days I have been asked to be disloyal to my leader. I could not," he said.

"I was asked to be a hypocrite with my principles. I could not.

"Over the last few days I have sought to build a consensus in the Liberal Party to show a way through [but] the party decided it wanted another approach and I respect that."

Abbott has asked Hockey to stay on as Shadow Treasurer, but he has yet to decide.

Turnbull, meanwhile, will serve out his remaining term on the backbenches, but has not yet decided if he will seek re-election.

Thanking his supporters and conceding his disappointment, Turnbull mixed congratulations to Abbott with a caution: "He has a big challenge ahead of him."