Few surprises in Howard's new team

Treasurer Peter Costello is tipped to succeed John Howard as Australia's prime minister

By CNN's Grant Holloway

CANBERRA, Australia (CNN) -- Australia has sworn in Prime Minister John Howard's new ministry, a team which retains many familiar faces in key jobs.

In a ceremony at Government House in the capital of Canberra Monday, Governor General Peter Hollingworth rubber-stamped the Howard coalition team which stormed to a third consecutive election victory on November 10.

Howard has retained leadership rival Peter Costello in the key finance portfolio of treasurer while Alexander Downer remains as foreign minister.

Barring a few exceptions, most of the changes in the new cabinet and outer ministry have been caused by resignations rather than by Howard wielding the axe.

Former environment minister Senator Robert Hill replaces the retiring Peter Reith as defense minister while Philip Ruddock remains as immigration minister.

Some political observers thought Ruddock may well be promoted to the defense role as recognition for the work he has done managing the difficult issue of asylum seekers and refugees.

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Australia has adopted a zero-tolerance policy on illegal immigration since mid-August when it turned away a Norwegian freighter carrying asylum seekers rescued from a sinking boat near Indonesia.

The decision provoked an ugly standoff between Australia, Indonesia and Norway and drew international criticism from many sources.

However the tough stance and subsequent tightening of Australian border laws was domestically popular and instrumental in Howard securing a third poll victory.

The asylum seekers issue, however, still presents a considerable challenge for the Howard government, not the least of which is the expensive and unsustainable current practise of intercepting and transferring boat-people to Australian-built and run detention camps in Papua New Guinea and Nauru.

Ruddock's retention in immigration suggests Howard needs Ruddock's experience in the portfolio to manage potentially difficult times ahead.

This is supported by Howard's decision to appoint a junior minister to assist Ruddock, with specific responsibilities for citizenship and multicultural affairs.

Elsewhere, one of Howard's personal favorites, Jackie Kelly, steps down as tourism minister because of the impending birth of her second child, but she has been given the less-demanding role of Howard's parliamentary secretary.

Succession plan

One key element of the new Howard team is, however, the lack of promotion for supporters of Costello.

Howard is on record saying he will examine his future when he turns 64, in about two year's time.

Most interpreted this as an indication Howard would hand the leadership reins to the ambitious but less-popular Costello before the next scheduled election in 2004, something which the opposition Australian Labor Party played upon during the election campaign.

But the new cabinet and ministry offers more demotions than promotions for Costello backers, suggesting any succession plans may be less clear-cut than first thought.

Costello's main rival for the top job should Howard step down is combative employment minister Tony Abbott, who has now been given the additional role of leader of the house.

John Anderson, leader of the rural-based coalition partner National party, retains his position as deputy prime minister but his party lost one cabinet position reflecting its poor performance on November 10.