Leading article: A new generation makes its voice heard

Few elections have so clearly overturned that old axiom from Bill Clinton's triumphant 1992 campaign – that "the economy, stupid" is what counts on polling day – as the vote that has delivered Kevin Rudd such a stunning victory in Australia.

Whatever else he got wrong, voters could scarcely fault the veteran John Howard with his overall stewardship of the economy. Over more than 11 years of expansion, wages have risen, national debt has been wiped out and unemployment has fallen to only 5 per cent.

True, the shine had recently come off the image of Howard's Liberals as voters took prosperity increasingly for granted and as the government's anti-union legislation began fracturing its alliance with the less-well-off "battlers" of Ozzie folklore.

Nevertheless, for all the growing feeling of insecurity over jobs in Australia, no one seriously believes the economy did for Howard in the end. Rather, it was his failure to take seriously the politics of a new generation for whom environmental questions, starting with climate change, have come to assume overriding importance.

Convinced that this was the equivalent of a political fetish of interest only to Sydney's chattering classes, Howard marched on, shoulder-to-shoulder, with his ally, George Bush, both in his opposition to the Kyoto climate agreement and over the Iraq war. On both issues, he blithely ignored warnings from pollsters that these policies were deeply unpopular.

Rudd, Howard's junior by almost two decades, has scented the winds of change blowing though Australia. It explains why his economic pledges have been relatively bland, and why initial policy pronouncements have included making the environment the priority, committing a Labor government to signing the Kyoto Protocol and to attending next month's climate change summit in Bali.

Much like Tony Blair in 1997, Rudd has inherited a country in which the electorate has not turned its back on the previous regime's principal economic achievements with any conviction. Instead, it thirsts for change of a more subtle kind, having tired of corruption scandals, arrogance and Howard's dogmatic and inflexible free-market Conservatism. Australians, in other words, want prosperity and action on the climate and have declined to be told – as Howard attempted to do in his campaign – that it is one or the other.

If Labor can combine its business-friendly credentials with its "green" agenda – and defuse the poisonous relations between the government and the Aboriginals – it has every chance of satisfying the public's evident desire for a change of direction that does not imperil its impressive, hard-won, affluence.