Mr Rudd,
whose party won a comprehensive weekend victory over the conservative
coalition led by John Howard, has also pledged his government to
withdraw 500 frontline troops in Iraq. He said the troops would leave
by mid-2008 after consultations with the US and the UK.

His
decision to go to Bali, which Mr Howard had not planned to attend, was
welcomed by Gordon Brown, the UK prime minister, as a “very important
factor” in the next stage of the global climate talks.

The
announcement is intended to draw a sharp contrast between Labor and the
Liberal/National party coalition, which had only recently begun to
address climate change issues seriously following a shift of opinion.

The
policies on climate change and Iraq will deepen US President George
W. Bush’s isolation on both issues following decisions by Poland and
other allies to withdraw contingents from Iraq. The US and Australia
are the only big developed countries not to have ratified Kyoto.

Labor
is also committed to diluting liberalised employment legislation
introduced by the coalition, which was strongly opposed by unions.
However, Labor policy is unlikely to diverge sharply from the coalition
on other issues. As expected, Wayne Swan, the opposition finance
spokesman, was named treasurer. Julia Gillard will be deputy prime
minister.

“I extend our greetings tonight to our great friend and
ally the United States, to our great friends and partners across Asia
and the Pacific. To our great friends and partners in Europe and
beyond, we look forward to a working partnership with all those
nations,” Mr Rudd said in his victory speech.

In a speech in
which he acknowledged the loss of his Bennelong seat, Mr Howard
accepted full responsibility for the “emphatic” defeat of his
coalition.

Mr Howard’s departure has left the Liberals in
disarray, a situation made worse after Peter Costello, his deputy and
the former treasurer, refused to take over the leadership in spite of
being endorsed hours earlier by Mr Howard and Alexander Downer, the
former foreign minister.

With final votes still to be counted,
Labor was on course to win more than 85 of the 150 seats in the House
of Representatives, recording one of the biggest swings against an
Australian government since the second world war.

Mr Rudd’s
success was sealed by a landslide in his home state of Queensland where
Labor picked up an extra 10 seats, with at least one recording a swing
of close to 15 per cent. The overall national swing to Labor was more
than 6 per cent.

Mr Rudd said he would be a modernist and a
consensus leader and would govern from the centre. He said his top
policy priorities would be education, hospital funding, industrial
relations and a high-speed national broadband roll-out.

However,
Mr Rudd becomes Australia’s 26th prime minister at a sensitive time.
Although the country is coming into its 17th year of expansion, the
economy is suffering from inflationary pressures and interest rates are
on the rise.