Australia’s Ruling Labor Loses Queensland in Landslide Vote

Australian Prime Minister Julia Gillard’s Labor party suffered its worst defeat at a state election in Queensland, deepening her challenge before a national ballot due in 2013.

The landslide against former Queensland Premier Anna Bligh leaves the party out of power in all but the two smallest of Australia’s six states. With almost 70 percent of ballots counted, the Liberal National coalition was ahead in 78 of the state’s 89 electorates, with Labor leading in 7, down from 51, according to the electoral commission’s website.

“The scale of the thrashing in Queensland is a wake-up call to Gillard that voters won’t tolerate any more mistakes from Labor,” said Andrew Hughes, who conducts political marketing research at the Australian National University in Canberra. “The result isn’t a sea-change, it’s a tsunami that’s completely wiped out Labor” in Queensland.

Queensland voters backed Liberal National Party leader Campbell Newman, a 48-year-old former army lieutenant who made history by leading his coalition to victory before holding a seat in the Queensland parliament. Bligh, 51, who was Australia’s first elected female premier, today announced her decision to step down as state Labor leader and resign from the Queensland parliament.

“The size of the loss, the loudness and clarity of the message sent by the people of Queensland is unmistakable,” Bligh told reporters in Brisbane today. “Queensland voted for a new government. It also voted to close the book on my era in Queensland politics.”

Minority Government

Gillard’s minority government, which trails the federal opposition by 12 percentage points according to the latest Newspoll, is struggling to revive Labor’s popularity nationally.

The prime minister needs to spend as much time as possible in Queensland selling her government’s policies, former Labor Queensland Premier Peter Beattie told the Australian Broadcasting Corp.’s “Insiders” program today. Labor “can lose the next federal election in Queensland alone,” Beattie said.

Newman, a former Brisbane mayor, is pledging to cut the state’s unemployment rate to 4 percent from the current 5.7 percent and restore its AAA credit rating, lost after Labor spent A$54 billion ($56 billion) to fix ailing infrastructure.

Newman countered allegations during his campaign that a property developer who made seven donations to his re-election fund as mayor was also conducting business from a property owned by Newman’s family.

All Queenslanders

“I pledge to you that we will conduct ourselves with dignity, grace and humility and we will work for all Queenslanders regardless of their vote tonight,” Newman said in claiming victory. “We don’t for a moment underestimate the magnitude of the task ahead.”

Queensland’s unemployment rate soared more than 2 percentage points during Bligh’s five years in power, as the local dollar’s climb to its strongest level since the early 1980s hurt the tourism industry in the region known as the “Sunshine State.”

Bligh, a former social worker who grew up in a single- parent home, won praise for her handling of the aftermath of Cyclone Yasi that hit Queensland in February 2011. The storm contributed to flooding that killed at least 35 people, affected 70 towns and cities and saw three-quarters of the state declared a disaster zone.

State Assets

The popularity of Australia’s first elected female premier sunk amid voter anger after Bligh raised A$15 billion from selling off state assets such as coal-train operator QR National Ltd. (QRN)

Queensland was an agricultural heartland for Australia until the late 1980s, when international tourism, led by Japan’s booming middle class, produced a development surge in Brisbane and the Gold Coast, which are now the nation’s third- and sixth- largest cities.

Queensland, Australia’s largest debtor state, lost its Aaa credit rating from Moody’s Investors Service in May 2009.

After winning power in 1989, Labor has ruled for all but two years in the state.

“The result is a combination of voters wearying of a party after so long in power and punishing it for its mistakes,” Australian National University’s Hughes said. “The party has lost most of its talent and future leaders, and the scale of this loss means it’s highly unlikely it will get back in power this decade.”

Labor will need to select a new leader in Queensland from a drained talent pool. The election rout has seen 10 Labor ministers lose their seats, including former Deputy Premier and Treasurer Andrew Fraser.

To contact the reporters on this story: Jason Scott in Canberra at jscott14@bloomberg.net; Jacob Greber in Sydney at jgreber@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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