Australia's Rudd faces first ministerial crisis

Canberra: Australian Prime Minister Kevin Rudd faced his first political crisis since taking office when his defence minister resigned on Thursday over travel and lobbying activities involving family and friends.

The development is a blow to Rudd, as outgoing Defence Minister Joel Fitzgibbon was a factional supporter and senior minister from the most populous New South Wales state, a key to winning national elections.

While the controversy surrounding Fitzgibbon, who was portrayed as politically clumsy, had led to a series of damaging headlines, analyst Nick Economou said his resignation would allow Rudd to draw a line under the affair and so keep open the option of an early election in late 2009 or early 2010.

"I suspect Rudd is thinking seriously about an early election. They needed to clear the decks, and Fitzgibbon had to go," Economou, from Melbourne's Monash University, said.

"There was more and more coming out about Fitzgibbon, which was hurting him and hurting the government."

The political crisis comes a day after Rudd and Treasurer Wayne Swan claimed credit for Australia avoiding slipping into a technical recession, defined as two consecutive quarters of economic contraction, thanks to more than A$52 billion (Dh154 billion) in economic stimulus since last October.