Australia

Area: 7,692,208 sq km (2,969,978 sq mi)

Population (2006 est.): 20,680,000

Capital: Canberra

Chief of state: Queen Elizabeth II , represented by Governor-General Michael Jeffery

Head of government: Prime Minister John Howard

Australian Prime Minister John Howard faced his biggest party revolt and public defeat in August 2006 when he was forced to withdraw proposed laws that would have extended the offshore processing of asylum seekers. Concerned MPs in Howard 's Liberal–National Party coalition reflected public opinion that was critical of the government, believing that Foreign Minister Alexander Downer and Immigration Minister Amanda Vanstone were making retrogressive changes in order to placate Indonesia . A public revolt in Howard 's own Liberal Party was led by Sen. Judith Troeth , who was concerned that the government intended to put women and children back into offshore detention without the prospect of review or appeal. Tony Burke, the Australian Labor Party (ALP) migration spokesman , derided the bill as "pretending as a nation we had no border."

Despite efforts to raise Aboriginal standards of living, crime and poverty remained dishearteningly high. Mal Brough, the federal indigenous affairs minister , offered U.S. New South Wales , the Northern Territory, and South Australia for new police stations. Brough called on the states to ensure that Aboriginal cultural law was not used as an excuse for criminal activity, and he expected the police in Aboriginal communities to crack down on substance abuse and domestic violence.$A 100 million ($A 1 = about $0.75) to

All Australia rejoiced in May when miners Todd Russell and Brant Webb were rescued after having spent 14 nights trapped in a Tasmanian mine almost a kilometre (more than half a mile) below the surface.

The dangerous rescue operation was televised over a two-week period. A third miner was killed at the outset of the catastrophe by the rockfall that trapped the men in an underground cage that measured 2 m (6.5 ft) wide and about 1.2 m (4 ft) deep. In September the nation mourned the sudden death of the naturalist and international celebrity "Crocodile Hunter" Steve Irwin . (See Obituaries.)

Newly appointed Minister for Defence Brendan Nelson had the difficult task of presiding over the political damage that followed the death in April of Private Jake Kovco , who died in Baghdad from a single bullet to the head. As one of the very few Australian casualties in the Iraq war zone, Kovco was mourned nationally. A military inquiry dismissed suicide as a cause of death, concluding that "inappropriate handling" of his weapon had led to the fatal injury. Bungling by the Australians involved in returning Kovco 's body to Australia made matters far worse. The wrong corpse was put in a coffin and transferred to Victoria for the burial.

In 2006 Treasurer Peter Costello brought down his 11th budget against a backdrop of backlashes against industrial relations reform and the high cost of bananas. Costello ignored Australia 's balance of payments problem, which was singled out for international criticism, and capitalized on the natural resources boom to reduce personal income tax, abolish tax on superannuation (occupational pension) payouts, increase family payments, and fund public works. The most significant of the latter was a project to put Costello admitted that rising gasoline prices were the number one challenge for householders in the year ahead. Homeowners were also concerned by the Reserve Bank, which moved interest rates up throughout the year in line with its policy to keep a lid on inflation and curb rising house prices in the booming real-estate regions.$A 500 million into restoring the health of the Murray River system. While the overall picture was bright,

Prospective trade with Iraq was damaged when Australia 's monopoly wheat exporter, the Australian Wheat Board (AWB), was accused of having paid bribes to former Iraqi president Saddam Hussein 's regime. The Australian government denied that it knew that the AWB, a participant in the UN's oil-for-food program in Iraq , had paid kickbacks. There was speculation about future trade deals with Iraq when the Australian Defence Force in June mistakenly shot bodyguards who were protecting Iraqi Trade Minister 'Abd al-Falah al-Sudani . The press reported that Sudani was threatening to scrap all trade deals and was demanding an apology and compensation from the Australian government.

The federal, New South Wales , and Victorian governments were all defeated in their plan to sell off the Snowy Hydro, an Australian icon that had provided hydroelectric power for generations. This deal would have netted Hydro sold, and ultimately public opinion was so hostile to the sale, which Liberal MP Bill Heffernan described as a "scandal," that the idea was dropped.$A 3 billion if it had proceeded. The prime minister conceded that most Australians did not want to see the

Australia 's international and regional security difficulties increased in 2006. The government continued to support the U.S. -led "war against terrorism" and decided to redeploy its 460 troops from their position in southern Iraq to Tallil, where there was a U.S. air base. Howard explained that even though the Japanese soldiers that the troops had been protecting were leaving Iraq , the Australian forces would remain to support the U.S. with intelligence and surveillance and in extreme cases "through direct military action."

The relationship between Australia and Indonesia was harmed when Australia granted 43 Papuans temporary protection visas, which entitled them to stay in Australia for three years. The asylum seekers were fleeing Indonesian West Papua. The Indonesian government recalled its ambassador and asked Australia to send the asylum seekers home, giving assurances that they would be treated well and not prosecuted. The Australian government was scrupulous in affirming that it did not support Papuan independence and promised to consult Indonesia in future cases and to change Australian law to make the process of receiving asylum more difficult. When the Australian government later failed to pass new asylum-seeker laws, Indonesia warned that Canberra 's action could be interpreted as opening the door to asylum seekers, including illegal immigrants who had been resident in Indonesia for many years. Howard wrote to the Indonesian government protesting against the early release from prison of the hard-line Islamic cleric Abu Bakar Bashir , who had been jailed in Jakarta for his part in the 2002 Bali bombings in which nearly 100 Australian tourists died. An unrepentant Abu Bakar Bashir retorted that Howard should become a Muslim if he wanted to avoid going to hell.

Australian troops and police were sent to East Timor in May after a formal request from the East Timorese government. Tension between renegade soldiers and East Timor Prime Minister Mari Alkatiri led to a breakdown of law and order. Some 2,000 Australians were deployed to restore stability and stem arson, gunfire, and banditry during the political crisis.

Riots in the Solomon Islands had repercussions throughout 2006. Solomons Prime Minister Manasseh Sogavare expelled Australian High Commissioner Patrick Cole in September and in October threatened to "kick Australians out of the country." The Regional Assistance Mission to the Solomon Islands , which was under threat when Sogavare claimed that Australians were trying to undermine his government, declined to assist in an Australian extradition request. Prime Minister Howard asserted, "There is a big issue at stake here, and we've put a lot of resources...troops...police...and we want the Solomon Islands to lift its game when it comes to issues of corruption and governance."

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