By Rob Taylor
CANBERRA, May 14 (Reuters) - An early election would not be in the interests of the economy or the country, Australia's Prime Minister Kevin Rudd said on Thursday, but he left the door open to a snap poll if upper house obstruction threatens his agenda.
The country faces an election in late 2010 and Rudd said he intended to serve his full three-year term, but he was equally concerned about protecting the integrity of the government's second budget, unveiled on Tuesday.
"I believe we were elected to serve a full three-year term. However ... you've got to ensure that the financial integrity of the budget that we just put before the parliament is upheld," Rudd told state radio.
"When people start cherry-picking about one bit after another, you've got to be very, very careful that we don't put the financial integrity of the budget, long-term, at risk," he said. Rudd's centre-left Labor has been accused by conservative rivals of laying the ground for an early poll by refusing to negotiate on key budget measures and carbon trade laws, introduced to parliament on Thursday.
The government needs the support of two independent and five Green senators to pass laws through a Senate in which conservative rivals control the largest voting bloc, with smaller players demanding changes to a raft of laws.
Green senators are demanding Rudd offers greater reductions to greenhouse gas emissions in the controversial carbon trade laws, while both the independents and Greens have questioned budget promises to wind back health and welfare, as well as raise taxes on certain alcoholic drinks.
Veteran conservative politician Wilson Tuckey said he doubted the government would opt for an early poll, because emissions trading laws before parliament that are likely to raise energy and fuel bills for many Australians would be too controversial.
"Double dissolutions always favour the minor parties," Tuckey said on Wednesday, warning Rudd a new Senate would likely be even more unstable as Australians typically punished governments who opted to run early.
Finance Minister Lindsay Tanner said an early election was the last thing on the government's mind, but, like Rudd, said budget laws should not be tinkered with by opponents.
"If we end up with the Senate and the opposition in the Senate effectively blocking some of the major (budget) saving measures, that does raise big questions for us," Tanner said. "We'll address those questions if and when they arise."
Rudd could have an election trigger by the end of June if the upper house Senate rejects laws to increase taxes on sweet alcoholic drinks, allowing him to call an election at any time.
The Senate must reject or block laws twice, with a gap of at least three months between votes, to give any government a constitutional trigger for an early election for the full Senate and all 150 members of the lower house.
(Reporting by Rob Taylor; Editing by David Fox)