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John Howard's chance to secure his legacy

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John Howard's election victory was mainly won on the strength of the economy. The Australian prime minister has been given a fourth term by a public expecting him to keep the 14-year expansion going. When it came down to it, voters who have benefited from growth - and others who decided at the last minute to stick with a government they know rather than take a gamble on a new one - helped give Mr Howard the edge.

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Divisions between Mr Howard and Labor challenger Mark Latham on the foreign policy front made little difference in the end, despite the portrayal overseas of the election as a referendum on Mr Howard's commitments on Iraq.

The most unexpected result of the poll is the likelihood that Mr Howard will, for the first time since coming to office, have effective control of the Senate, the upper house of the national legislature. This will allow him to dust off and push through some proposals that have been beaten back by an opposition-controlled Senate over the past eight years.

Among the big-ticket items on Mr Howard's wish list are the full privatisation of Telstra, and liberalising media ownership rules and laws that give smaller companies greater leeway in hiring and firing employees. These are prospects the business community has greeted enthusiastically, but the details of legislation to be put forward will tell us how far Mr Howard is going to push his agenda and how much of a fight he will have on his hands.

Questions such as where the windfall from selling the government's stake in telecommunications firm Telstra will be invested have yet to be answered. The same can be said for how much cross-media ownership will be allowed, although indications are he will seek to abolish caps on foreign ownership of Australian media. Aside from reviving a bill to exempt small businesses from unfair dismissal laws - a bill defeated 41 times in previous Senates - Mr Howard may choose to champion other laws curtailing the reach of unions and union contracts, setting the stage for confrontation.

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If the vote was an endorsement of Mr Howard's stewardship of the economy, his test may come soon. High levels of national and household debt, along with high property values, have fuelled fears of a fiscal crunch brought on by a drop in home prices, a global downturn, rising interest rates - or a combination of these. No expansion lasts forever, but if Mr Howard uses his mandate to keep this one going, he will secure a big part of his legacy and keep his Labor rivals on the run.

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