Australian Prime Minister Julia Gillard is going American in a big way by setting the next national election seven months from now. The record length of the campaign is bad news for her opponent, Tony Abbott, and may be even worse for the nation’s 23 million people.

Turning to a permanent campaign like that of the U.S. is shrewd politics. It puts opposition leader Abbott on the defensive, forcing him to offer more than tired conservative nostrums about the magic of lower taxes, less regulation and vague paeans to freedom. Instead, Abbott must offer specifics on how he will increase competitiveness and prosperity and how to pay for it.

Gillard’s gamble comes with some big risks. The most immediate is that this long election process descends into an endless series of photo opportunities, stunts, breathless horse-race calling and sexist obsessing over Gillard’s new glasses, haircut or hemline. Lost in the jostling will be a much-needed discussion about the huge challenges Australia faces as much of the rest of the world copes with anemic or unbalanced growth.

Australia’s problems are great ones to have, all things considered. It’s the only major country to skirt the 2008-2009 financial crisis and its balanced federal budget is the envy of the developed world. Proximity to China and its voracious appetite for Australia’s raw materials continue to drive economic growth, which is forecast to increase 3.5 percent this year.

In a rapidly changing world, a nation such as Australia must constantly remake itself. It has to be devising ways to compete, create jobs, increase productivity, adapt to an overvalued currency and address the risks posed by climate change. Can Australia really afford another “Seinfeld Election,” meaning that it’s about nothing?

That’s what happened the last time around, in August 2010. Then, Labor Party leader Gillard had been prime minister for only a few months, having wrested power from Kevin Rudd. Neither Gillard nor Abbott came to the election with novel ideas for stimulating the economy or preparing for an aging population. There were no specifics about how to harness China’s boom without falling prey to “Dutch disease,” whereby the benefits of exporting natural resources lead to the neglect and atrophy of other industries. It has led to a two-speed economy.

There were no serious plans for boosting investment in infrastructure, education and training. No credible strategies for revamping a tax system that encourages many of the nation’s brightest and most productive people to seek jobs abroad. No palatable proposals get a bigger piece of the vast wealth being amassed by mining companies to spread the benefits of growth.

The coming election and campaign should be of a different nature, and a new Standard & Poor’s report shows why. On Jan. 31, S&P warned that Australia’s mining boom may be peaking and that the economy could stumble if the country’s huge bet on the resources sector goes wrong. It also said China has the highest risk of an economic slump among 32 of the world’s largest economies because so much of its growth depends on outsized investment spending.

Australia is arguably the biggest leveraged bet on China in the world. If Asia’s biggest economy slows, officials in Canberra can forget about achieving a sustained budget surplus. Politicians also will rue the day they put whatever chips they didn’t wager on China on the central bank, abdicating their own responsibility to recalibrate the economy.

The term of Reserve Bank of Australia Governor Glenn Stevens is up three days after the election, and Gillard has yet to re-nominate him. It smacks of cheap politics, considering Stevens’s standing among the world’s central bankers. In all likelihood, she is reserving the right to blame any troubles that may arise on the RBA. Investors looking for greater certainty about economic leadership will have to wait.

Households, too. Smart monetary policy is critical in a nation in which about 90 percent of homeowners have adjustable-rate mortgages. Household indebtedness is an underplayed risk at a time when the cost of living may be advancing faster than official inflation figures indicate. Just ask the average Australian whether he or she believes consumer prices are up only 2.2 percent in the past year.

The government needs to do its part, too. That means true and visionary leadership of the kind Australia arguably hasn’t seen since the days of Bob Hawke and Paul Keating. During their terms in office in the 1980s and 1990s, Australia adopted a floating currency, reduced import tariffs, internationalized the financial sector that employs so many today, and created a compulsory national pension system.

The achievements of leaders since then, from John Howard to Rudd to Gillard, pale by comparison. Just as Abbott has the burden of laying out a credible plan, Gillard must convince voters that she will get more done in the next couple of years than she did in the past 2 1/2.

She has, on occasion, defied convention. Her taxes on carbon and mining profits, for example, were steps in the right direction. Yet her waning popularity shows electioneering won’t do. She needs to prove why she deserves more time.

Australians want more than a never-ending campaign. They deserve it, too. 

By William Pesek

William Pesek is a Bloomberg View columnist. The opinions expressed are his own. ― Ed.

(Bloomberg)