Australian opposition leader warns of second election

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.

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