Time to get down to business, Kevin

Kevin Rudd's first day back as Prime Minister hasn't answered questions business and the markets have about the leadership change.

Question number one is, when do Australians get to vote?

The expectation on Wednesday evening after Rudd's win was that the election date Julia Gillard set more than four months ago, September 14, would be dumped, and that Rudd would go to the polls in August. On Thursday, the new speculation was that the election would be pushed out towards the end of October.

A longer campaign would not be welcomed by business leaders, who believe that Australian consumers and companies will be in hibernation until an election is held, but Rudd and his deputy, Anthony Albanese, gave few clues in an anticlimactic question time on Thursday afternoon.

The Prime Minister's comment that the September 14 date conflicts with Yom Kippur was taken as a signal that the date would change, but it could be that he will taste-test post-coup polling before deciding which way to jump.

Another issue for business, and for the currency and bond markets in particular, is whether Rudd will close the policy gap between Labor and the Coalition, or widen it. Again, Thursday's proceedings were inconclusive.

Rudd said before and after his successful challenge to Gillard that he wanted Labor to "work together" and early on Thursday it looked as though there was going to be a totemic move on that front as a bill that toughens up 457 visa rules by requiring companies to demonstrate that they have tested the local jobs market before bringing in 457 workers disappeared from the parliamentary program.

The 457 bill reappeared after Rudd was sworn in as Prime Minister, however, and passed in the lower house on a majority of 73 votes to 72 after retiring independent Tony Windsor backed it.

The 457 change certainly doesn't get Rudd closer with business, but if he is looking to get some monkeys off Labor's back, other moves could.

A shift from the carbon tax to carbon trading using Europe's carbon trading scheme as the pricing benchmark ahead of its originally envisaged mid-2015 transition date would, for example, re-base the cost of carbon and carbon emission permits in the economy, at about a quarter of the carbon tax price based on current European prices.

If he did not impose a floor price, Rudd would be criticised for easing pressure to cut emissions, but he could argue that a market-based price is the end-game for Australia.

Such a shift would, however, come at a cost to the budget that raises a broader question about where Rudd is headed.

The 2013-14 budget has the carbon tax collecting $6.27 billion this financial year and $6.4 billion in 2014-15.

Treasury is almost certainly over-optimistic in assuming that receipts will only fall by 27 per cent in 2015-16 as the fixed price tax is replaced by carbon trading on the original schedule, but it is the two earlier years of projected carbon tax revenue that are affected if trading arrives early. Electricity generator and other heavy industry subsidies could also be unwound, but that would recoup only about $1 billion.

Rudd could kill off another of Tony Abbott's big tax wedges at less cost to the budget. Last May's budget estimated that the mining tax that Wayne Swan, Julia Gillard and Treasury negotiated after Rudd was sacked as leader in 2010 would collect only $200 million this financial year, $700 million in 2014-15 and $1.4 billion in 2015-16.

Discussion of Rudd's options only serves to highlight the fact that it is yet unclear whether he will seek to close the policy gap between Labor and the Coalition or widen it. Instead of setting the mining tax aside, for example, he might also decide to announce plans to expand it.

That, in turn, highlights another unknown. In the lead-in to the election, are Australia's fiscal settings going to blow out?

Rudd has already claimed that the Coalition intends to cut and paste a British Conservative government fiscal strategy that saw Britain endure a double-dip recession.

That is a signal that a Rudd government's fiscal settings would be more stimulatory than a Coalition government's settings.

The more intriguing question is whether a Rudd government's settings would also be more expansive than those set out by the former Treasurer, Wayne Swan, when he handed down the government's budget in May.

The budget predicted a $19.4 billion deficit in the financial year that is drawing to a close this week, an $18 billion shortfall in 2013-2014, a $10.9 billion deficit in 2014-2015, a wafer-thin $800 million surplus in 2015-2016 and a $6.6 billion surplus in the following year.

Will Rudd stretch that timetable to give himself some headroom for new policy initiatives? Will the Coalition hold its ground if he does?

We must wait to see.

mmaiden@fairfaxmedia.com.au