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Australia's ruling Labor headed for state election bloodbath
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Australia's ruling Labor headed for state election "bloodbath"
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By Michael Perry
SYDNEY (Reuters) - Australian Prime Minister Julia Gillard's Labor party looks set to suffer a big defeat on Saturday in elections in the nation's most populous state, leaving three out of six states under Labor as she tries to...
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By Michael Perry
SYDNEY |
Fri Mar 25, 2011 3:01am EDT
SYDNEY (Reuters) - Australian Prime Minister Julia Gillard's Labor party looks set to suffer a big defeat on Saturday in elections in the nation's most populous state, leaving three out of six states under Labor as she tries to bring in a national carbon price and mining tax.
A Labor "bloodbath" in the New South Wales (NSW) election will politically damage Gillard, who holds a one-seat majority, thanks to independents and Green MPs.
Labor has held power for 16 years in NSW, a key state in national elections, but opinion polls indicate a series of political scandals and failed infrastructure projects has sealed its fate at the ballot box.
With an eye to the next national election, due by March 2013, Gillard will be hoping NSW voters will vent their anger against Labor now and be more forgiving when she faces them.
"When voters take their baseball bats to state Labor on Saturday, there will be a sense of catharsis and they may be more accepting of the federal government," said Phillip Coorey, chief political correspondent for The Sydney Morning Herald.
A poll showed the government's support had fallen to record lows over plans to put a price on carbon pollution, though support has rebounded since Gillard floated the prospect of compensation.
Gillard has also said Australians deserve a greater share in soaring mining profits. She has pledged to introduce a 30 percent tax on iron ore and coal mines with annual profits of $50 million or more by the middle of 2012. The controversial tax, expected to affect 320 mining companies, should raise $7.4 billion in its first two years.
An opinion poll in Sydney's Daily Telegraph newspaper on Friday forecast state Labor would only retain 14 out of 93 lower house seats in NSW to suffer its worst electoral defeat in 110 years.
INVESTORS SEE INFRASTRUCTURE SPENDING RISE
The more immediate impact of a Labor defeat in NSW, whose A$400 billion economy is comparable in size with Taiwan, is likely to be economic.
A new conservative government in NSW is expected to launch a major infrastructure spending program, especially in the road, rail, ports and electricity sectors.
State Liberal-National parties also plan to hold an inquiry into the December 2010, A$5.3 billion sale of state electricity assets to Hong Kong's CLP Holdings and Origin Energy, saying the sale undervalues the assets.
Origin acquired retailers Country Energy, Integral Energy and gentrader rights to the Eraring power station. CLP's Australian retailer TRUenergy acquired NSW's largest retailer EnergyAustralia and the DeltaWest gentrader contract.
Depending on the inquiry recommendations, which will be presented to the next parliament, one option is to reverse the sale, said a spokesman for Liberal leader Barry O'Farrell.
But a new state government may be stymied from dumping the deal due to legal obligations signed by the previous Labor government.
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