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Australian Prime Minister Julia Gillard, left, with Opposition Leader Tony Abbott during the first leaders' debate at the National Press Club in Canberra, Australia. - 


BILL RADKE: Midterm elections are on the way and conventional wisdom is, Democrats should be nervous because -- as far as voters are concerned -- it's the economy, stupid.

Well, Australians are going to the polls this weekend and the same rule holds true Down Under. The BBC's Phil Mercer reports from Sydney.

PHIL MERCER: Compared to many countries around the world, Australia fared pretty well during the global downturn. But television ads by Australia's Conservative party accuse the Labor government of squandering billions of dollars on unnecessary stimulus payments.

Tony Abbott is the opposition leader.

TONY ABBOTT: We will be in a much weaker position to any new international crisis because of the spending spree this government has been on. I mean, the government likes to boast about its economic credentials, this mob have turned a $20 billion surplus into a $57 billion deficit.

But the Prime Minister Julia Gillard insists her government's stimulus measures saved Australia from recession.

PRIME MINISTER JULIA GILLARD: Australians face a choice. A choice between my economic plan for the future or Mr. Abbott's lack of economic plan.

The debate in the U.S. focuses on which party will help the American economy recover. But whichever side wins Saturday's election in Australia will assume control of an economy with some considerable strength -- powered by exporting minerals to China.

In Sydney, I'm Phil Mercer for Marketplace.