Australia?s conservative prime minister John Howard, a key US ally and supporter of the Iraq war, celebrated his election win yesterday after voters enjoying the fruits of a strong economy gave him a fourth term.

Howard?s ruling Liberal-National coalition claimed a decisive victory on Saturday with what appeared certain to be an increased majority over the centre-left Labour opposition. In December he will become Australia?s second-longest serving prime minister.

?This nation stands on the threshold of a new era of great achievement ... a nation which can achieve anything it wants, if its sets its mind to it?, a beaming Howard told supporters at a downtown Sydney hotel late on Saturday.

Howard?s victory ensures that Australian troops will stay in Iraq. Labour leader Mark Latham wanted Australia?s 850 troops serving in and around Iraq home by Christmas.

The election attracted international attention because Australia?s two Iraq war allies also soon face elections, the United States on Nov. 2 and Britain next year. The leaders of both countries were quick to congratulate Howard.

?Australia is a great ally in the war on terror, and John Howard is the right man to lead that country?, US President George W. Bush told a campaign rally in the United States.

British prime minister Tony Blair also called Howard early yesterday to congratulate him.

Yesterday newspapers hailed Howard?s win, with Melbourne?s Sunday Age banner headline blaring, ?All power to Howard? and Sydney?s Sun Herald saying, ?Howard wins his place in history?.

Funding government activities

Analysts said financial markets would breathe a collective sigh of relief today, with no immediate impact expected on stock prices or the Australian dollar.

The main surprise was the government?s Senate gains that could give it control of the upper house, which has previously blocked key legislation such as the privatisation of Australia?s dominant phone company, Telstra Corp. Ltd.

?Of course the chances that Telstra gets fully privatised are greatly improved for the government. It wants that money to fund a number of government activities and therefore I think we will see swift action on that issue?, Paul Budde, an independent telecommunications analyst, told Reuters.

Westpac Banking Corp chief economist Bill Evans told local television that the government?s likely victory in the Senate would see significant further deregulation of the labour market.

?And that has to be a big positive, particularly from the perspective of keeping interest rates low and keeping inflation low at a time when the economy?s very strong?, he said.

Underlining the steady-as-she-goes message, no major reshuffle of Howard?s cabinet is expected.

Labour members said the government had effectively turned voters against the party and Latham by questioning Labour?s ability to run the economy and keep interest rates low.

?It demonised Labour?s economic credentials and they ran a quite outrageous scare campaign about what would happen to interest rates if we were elected?, Senator Stephen Conroy said. Howard, 65, is a master politician seen by voters as bland but safe while the fiery Latham has a colourful turn of phrase but is still seen as a relatively unknown quantity after only 10 months as opposition leader, a position he is expected to keep.

Voters focused more on domestic concerns such as interest rates during the six-week campaign rather than Howard?s unstinting support for the United States and its Iraq war or Labour?s preference for closer ties with Asia.

Many Australian voters are sitting on comfortable gains from a hot housing market and are also enjoying the benefits of strong employment, relatively low interest rates and a buoyant stock market.

Howard?s coalition held 82 seats in the 150-seat parliament after the 2001 election, but media forecasts said the government could now hold 87 seats in the new parliament, with Labour likely to drop back four to 60.

With almost 78 percent of the 13 million votes counted by early Sunday, official Australian Electoral Commission (AEC) figures recorded a swing of almost two percent to the government.

The AEC gave the coalition 52.5 percent support to Labour?s 47.5 percent support on a two-party preferred basis under which preference votes from minor parties are distributed to major parties and which ultimately determine the outcome of elections.

Paul TAIT