[1] The total expenditure, as a share of gross domestic product (GDP), was lower than any of the previous governments, despite including many of the expensive election promises for "working families".

[17][18][19] RBA governor Glenn Stevens remained cautious of American-style fiscal policy, casting doubt on the idea that Australia should have a higher inflation target to repair its public accounts.

Among other suggested reforms recommended by the Henry review and adopted by the Rudd government was a Resource Super Profits Tax on the extractive industry.

[24] Other defence policies enacted by the Rudd government include cancelling the contract to purchase 11 Seasprite helicopters in March 2008,[25] and beginning the process of planning the replacement for the Navy's Collins-class submarines.

He quit after admitting that meetings concerning business opportunities held between defence officials and his brother, the head of nib Health Funds, had breached the Ministerial Code of Conduct.

[37] To win the support of the Greens and Senator Nick Xenophon and to mitigate the opposition of the Liberals and secure passage of the bill, Education Minister Julia Gillard loosened some aspects of the changes to rural arrangements.

[39] At the time, econometric research suggested that providers of carbon credits under the voluntary Australian Greenhouse Office trading scheme were capable of stabilising emissions, due to the demand from households for carbon-neutral products.

[45] In June 2010, the environment minister, Peter Garrett, revealed in an interview with Sky News that he first learned of the change in policy when he read it in a newspaper after being leaked by a government source.

[46] This followed damaging comments by Professor Tim Flannery, a strong supporter of Labor's scheme, that he felt "betrayed" by the Prime Minister's decision.

[49] The government instead hoped to become a world-leading investor in carbon capture and storage technologies, and expand Australia's natural gas production, while continuing to support a raft of new coal-mining projects worth about $11 billion.

[51] Prime Minister Rudd announced in March 2008 that Australia would seek a non-permanent seat on the United Nations Security Council for 2013–14, which the country had last held in 1985–86.

In an April 2008 visit to China, Rudd addressed an audience in Mandarin at Beijing University, in which he told students that Australia had concerns over human rights issues in Tibet and later repeated the comments to Premier Wen Jiabao.

[57] The Rudd government's 2009 Defence white paper identified the rise of China as a potential threat to Asia Pacific security, and during the WikiLeaks affair, confidential diplomatic cables were released which purported to show that Rudd had warned the US Secretary of State Hillary Clinton that the Communist Party was "paranoid" about Taiwan and that the US should be prepared to use force against China "...if everything goes wrong".

[58][59] Responding to the New South Wales coroner's late November 2007 finding that the Balibo Five had been deliberately murdered by the Indonesian military in 1975, Rudd commented that "those responsible should be held to account.

In announcing the demise of the policy, Evans described it as "a cynical, costly and ultimately unsuccessful exercise", and the 21 people housed at the Nauru detention center were transferred to Brisbane.

In response, the government announced a new strategy of offering financial support to Indonesia to assist in their efforts to reduce people smuggling to Australia.

[85] According to Geoff Kitney, a Fairfax journalist who has covered immigration since the 1980s, his explanation of the terms of the agreement left the impression that, at the very least, he knew it would be difficult to show that the deal was not a cave-in.

[87] In April, the Rudd government suspended processing new claims by Sri Lankan and Afghan asylum seekers, who comprised 80 percent of all boat arrivals, for three and six months, respectively.

West Australian Premier Colin Barnett has been told by Evans that up to 90 asylum seekers would move to an unused mining camp near Leonora, more than 800 kilometres (500 mi) north-east of Perth.

[107] Employer groups for the hospitality industry expressed concern over the legislation, suggesting more rigid and expensive wage and other outcomes with employees would be particularly difficult for many businesses to afford during an economic downturn.

[114] By signing the historic Close the Gap Statement of Intent on 20 March 2008, Rudd committed the government to achieving health equality in a way that respects the rights of indigenous people.

[115][116][117] One year after the apology, Michael Mansell, Amnesty International and stolen generations victim Marjorie Woodrow called for the government to provide reparations as recommended in the Bringing Them Home report.

[118][119][120] In the first of the government's so-called 'indigenous report cards', delivered each year to parliament, Rudd said that new eye and ear health funding had been secured; noted that 80 houses for indigenous Australians had been built; said that the government had continued the Northern Territory Intervention; and gave his personal support to an initiative led by mining magnate Andrew Forrest to provide 50,000 indigenous jobs.

[123] Under a policy called A Working Future, the state set out $160 million to develop twenty "Territory growth towns" into hubs for surrounding communities.

[129] In February 2008 Rudd announced the Australia 2020 Summit, held 19–20 April 2008, which brought together 1,000 leading Australians to discuss ten major areas of policy.

[130] The summit voted in favour of a plebiscite on Australia relinquishing "ties" to the United Kingdom followed by a referendum on the model for an Australian republic,[131] a bill of rights, and the re-formation of an Indigenous peak representative body similar to Aboriginal and Torres Strait Islander Commission (ATSIC), which had been abolished by the Howard government in 2005.

In April 2009, Rudd announced that of the 962 recommendations of the summit, the following 9 would be adopted:[132] After an initial period of popularity, by mid-2009, following the failure of the government's home insulation program and amidst controversy regarding the implementation of a tax on mining, the failure of the government to secure passage of its Carbon Trading Scheme and some debate about immigration policy, significant disaffection had arisen within the Labor Party as to the leadership style and direction of Rudd.

[136] In her 2012 book Tales From The Political Trenches, McKew wrote that Gillard was a "disloyal" and "impatient" deputy who was heavily involved in a well-planned operation to remove Rudd from the prime ministership.

[140] In the aftermath of this leadership challenge, Shorten, a former trade union leader and key Parliamentary member of the Labor Right Faction, proposed that the shift in support was due to the government's handling of the home insulation program, the sudden announcement of change of policy on the Carbon Pollution Reduction Scheme, and the way in which the government had "introduced the debate" about the Resource Super Profits Tax.

He said that his economic management, removal of Workchoices, commencement of the National Broadband Network, education, health, welfare, environment, foreign and indigenous policies made him proud.