Bloomberg News

Western Australia Liberals Win State Election in Blow to Gillard

March 10, 2013

Colin Barnett, Liberal party premier of Western Australia state, won state elections with an increased majority amid a mining boom and waning popularity for Prime Minister Julia Gillard’s Labor party.

The Liberals are forecast to win 33 seats in the 59-member legislative assembly after an 8.8 percentage point voter swing in the party’s favor in the March 10 election, the Australian Broadcasting Corp. said, based on 75 percent of the vote being counted. Labor will win 19 seats after a 2.3 percentage point swing against it.

Labor is in opposition in the four biggest of the nation’s six states and trails in national polls ahead of the Sept. 14 federal election. In Western Australia, Gillard’s tax to snare mining profits has alienated voters in the state that produces a third of the world’s traded iron ore.

“The federal Labor brand is tarnished at the moment and I think that does rub off on the state branches,” Zareh Ghazarian, a lecturer in politics at Monash University, said by phone from Melbourne. The strength of the state economy and the lack of any major scandals were also decisive in the result, he said. “All the stars have aligned to make this government get more votes.”

The difficulties of federal Labor had dragged down the Western Australian party, Stephen Smith, the country’s defense minister and holder of one of the state’s three federal seats, was cited as saying by the West Australian newspaper. The federal election in September will go down to the wire, he said.

Opinion Polls

Gillard’s ruling Labor party trails the Liberal-National opposition by 10 percentage points at the federal level, according to a Newspoll survey published in the Australian newspaper Feb. 26.

“At the moment, I don’t think Labor has the trust of the West Australian people,” Geoff Gallop, who served as Labor premier of Western Australia from 2001 to 2006, said on Sky News television yesterday. “The Labor party does have major issues structurally.”

Western Australia, more than three times the size of Texas, is enjoying a decade-long boom, comparable with its 1890s gold rush, on Asian demand for its resource riches. The state has an investment pipeline of A$141 billion ($144 billion), more than half of Australia’s total, according to estimates from the Bureau of Resources and Energy Economics.

Work is progressing on Chevron Corp. (CVX:US)’s A$52 billion Gorgon liquefied natural gas project and BHP Billiton Ltd. (BHP)’s expansions to iron ore operations. The state is also home to mining magnates such as Gina Rinehart, Australia’s richest person, and Fortescue Metals Group Ltd. (FMG) founder Andrew Forrest.

Resources Industry

Reflecting the strength of the resources industry, final demand in the state surged 14.2 percent from a year earlier in the fourth quarter, Australian Bureau of Statistics data released March 6 shows. Western Australians have the highest average earnings of any state and an unemployment rate of 4 percent, against the national average of 5.4 percent.

Labor’s links with the trade union movement are now alienating it from the wider public as union membership declines, Mark Latham, who led the party into the country’s 2004 national election, said on Sky News television yesterday.

“The ship’s going down,” Latham said. “Modern trade unionism has got about 10 percent of the voting public now. If you want to be a party of 10 percent of the voting public you’re not a mass party, you’re an interest group and you’ll get an interest group result.”

The result in Western Australia will be enough for Barnett to govern without the support of the National party, which has backed him since the 2008 state election resulted in a hung parliament. While the Liberals and Nationals have operated as a coalition at the federal level since the 1940s, they don’t always ally in state politics.

To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Stanley James at sjames8@bloomberg.net


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