Bloomberg News

Gillard Leadership Questioned as Western Australia Liberals Win

March 10, 2013

Prime Minister Julia Gillard returns to parliament tomorrow facing fresh scrutiny over her leadership after the Labor party suffered a blow in state elections in Western Australia as the Liberals were re-elected with an increased majority.

State Premier Colin Barnett’s Liberals are forecast to win 32 seats in the 59-member legislative assembly after an 8.8 percentage point voter swing in the party’s favor in the March 9 election, the Australian Broadcasting Corp. said, based on 76 percent of the vote being counted. Their coalition partner, the National Party, is forecast to win seven seats, and opposition Labor 20 seats after a 2.2 percentage point swing against it.

Federal politicians return to Canberra this week after Gillard’s five days of campaigning in marginal seats in Sydney’s west failed to boost Labor’s standing, according to an opinion poll published today. In Western Australia, her tax to snare mining profits alienated voters in the state that produces a third of the world’s traded iron ore.

“On the W.A. evidence, the likelihood is that they’ll be going backwards,” said David Briggs, a spokesman for Galaxy Research in Sydney. “They couldn’t get the voters away from issues of the carbon tax and the mineral resources tax.”

A Galaxy poll published in the Daily Telegraph newspaper showed Labor’s support falling one point to 45 percent on a two- party preferred basis, while federal opposition leader Tony Abbott’s Liberal-National coalition gained one point to 55 percent. The poll of 1,010 people conducted March 5-7 showed only 32 percent of voters said Labor should keep Gillard as leader, with 26 percent favoring her predecessor Kevin Rudd, and 33 percent opting for a new figure to head the governing party. No margin of error was given.

Gillard’s office declined to comment on the implications of the state result for her leadership, and referred to a March 10 statement in which she congratulated Barnett on his re-election.

Rudd Bets

Punters have increased bets that Rudd, who Gillard ousted in a late-night party coup in June 2010, will lead Labor at the Sept. 14 election, Sportingbet Australia said in an e-mailed statement. He is now paying A$1.90, equal favorite with Gillard. Labor is at A$5.90 to win the election, the longest odds since March 2011, and the Coalition is a A$1.12 favorite, Sportingbet said.

“It’s been one way traffic for Rudd since the weekend and we can’t write a ticket for Gillard,” Sportingbet Australia Chief Executive Officer Michael Sullivan said.

Tarnished Brand

Labor is in opposition in the four biggest of the nation’s six states and trails in national polls.

“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 Western Australia economy and the lack of any major scandals were also decisive in the result, he said.

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.”

To contact the reporters on this story: David Fickling in Sydney at dfickling@bloomberg.net; Angus Whitley in Sydney at awhitley1@bloomberg.net

To contact the editor responsible for this story: Edward Johnson at ejohnson28@bloomberg.net


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