Rudd Relies on Queensland Roots as Defeat for Labor Looms

Photographer: Chris Hyde/Getty Images

Kevin Rudd, Australia's prime minister, center, visits Brisbane Adventist College in Brisbane, Australia, on Aug. 6, 2013. Close

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Photographer: Chris Hyde/Getty Images

Kevin Rudd, Australia's prime minister, center, visits Brisbane Adventist College in Brisbane, Australia, on Aug. 6, 2013.

Prime Minister Kevin Rudd’s prospects at this week’s election hinge on his home state of Queensland, a region 2 1/2 times the size of Texas that’s given federal Labor a majority of votes just once in 20 years.

Rudd’s governing Labor party must pick up seats in the state to offset forecast losses in its heartland of western Sydney, another battleground in the Sept. 7 vote. Opinion surveys suggest Rudd’s local roots won’t be enough to propel Labor over the line in opposition-held Queensland districts.

“Rudd’s appeal hasn’t held up in Queensland during the election,” said Stephen Stockwell, a political analyst at Griffith University in the state capital Brisbane. “People have underestimated the trouble the Labor brand has here.”

Underscoring the state’s importance, Rudd and Liberal-National coalition leader Tony Abbott opened their campaigns in Brisbane, where pockets of unemployment above 20 percent reflect an economy squeezed by an elevated currency and high household debt. Dissatisfaction with state Labor, which suffered its worst ever defeat at elections last year, is outweighing Rudd’s personal standing and damaging the party’s federal prospects.

Seeking to win back Queenslanders, Rudd has proposed shifting a naval base from Sydney to Brisbane at an estimated cost of A$6 billion ($5.3 billion), and promised to help pay for an under river rail tunnel. Abbott opposes the naval shift and said it’s up to the state government to pay for urban rail.

“I want to see Australia boom again,” said Phillip Davis, 49, a Brisbane-based construction worker who voted for Rudd in 2007 and plans to back the coalition for the first time. “For consumer confidence we need to change government.”

State Wipeout

Last year, the Liberal National Party ended 14 years of state Labor rule in the resource-rich region that generates a fifth of Australia’s wealth, winning 78 out of 89 seats. Labor was hurt by corruption scandals and voter anger over the sale of A$15 billion in public assets without consulting the electorate.

Labor lost seven federal seats in Queensland in the 2010 general election that was held two months after Rudd was ousted in a party coup and replaced by his deputy, Julia Gillard from Victoria state. The ensuing infighting within the party as Gillard struggled to manage a hung parliament and hold off Rudd supporters has led to disillusionment with the government.

“Everyone is sick of the soap opera in Canberra,” said Tim Woodhouse, 39, who owns and operates a hardware store in Brisbane’s western suburbs and voted for the coalition in 2010.

Labor returned Rudd to the leadership June 26, seeking to buoy its electoral chances and tap goodwill toward him in his home state, which has 30 federal electoral districts. Labor holds eight, the coalition 20 and independents two.

Local Factor

“I am a Kevin Rudd fan because I reckon he is one of us,” said David Lake, 49, who owns and operates a print design business in Brisbane, and has voted for both Labor and the opposition coalition. He intends to vote for Rudd. “The person is as important as the party,” he said.

Rudd has sought to use spending cuts by the Queensland conservative state government led by Campbell Newman as leverage in the campaign against Abbott, warning a federal coalition would slash services even harder. Labor recruited former Queensland premier Peter Beattie -- who led the state for nine years through 2007 before retiring -- to run in the marginal electorate of Forde.

“We can prevail and we will prevail,” Rudd yesterday told party faithful who packed the Brisbane Convention Center for a nationally televised speech in which he promised tax breaks for small business and legislation to ensure Australian companies participate more in major expansion projects. “I’ve been in tougher spots than this and I’ve come from behind before.”

Poll Lag

With 71 seats in the 150-member lower house, Rudd’s minority government already trails the coalition by one and must win at least five more seats to retain office without support from the Greens and independents. Opinion polls show that’s unlikely.

The coalition leads Labor 54 percent to 46 percent on a two-party preferred basis, a Newspoll published today in the Australian newspaper showed. The survey, conducted Aug. 30-Sept. 1 among 1,116 voters and with a margin of error of 3 percentage points, showed Abbott overtaking Rudd as preferred prime minister for the first time, 43 percent to 41 percent. Among eight marginal Queensland seats not held by Labor, the coalition leads 60 percent to 40 percent, according to a Newspoll survey published Aug. 24.

Premier Joh

Queensland was ruled by conservative state governments from 1957 until 1989, including 19 years under Premier Joh Bjelke-Petersen. He was deposed from the leadership of the Nationals in 1987 and the party lost the 1989 election as an inquiry revealed corruption and misuse of the police force. Since then, at a state level, Labor ruled for 21 of the next 23 years before losing office in the 2012 landslide.

Queensland is the third-biggest state by population and more than half of world steel-making coking coal comes from the Bowen Basin in central Queensland.

Apart from the liquefied natural gas industry, the state’s economy struggled in the past six years as the sustained strength of the Australian dollar weighed on the tourism and education industries. A property glut in the state’s southeast that includes the Gold Coast sent the price of apartments plummeting by about 25 percent.

“There’s not been too many bright spots apart from LNG in the Queensland economy for the past few years,” said Michael Turner, a debt strategist at Royal Bank of Canada in Sydney, who hails from the Gold Coast. “It’s been a struggle in the property market in the southeast corner.” Unemployment there has also been “noticeably higher” than the national average over the past couple of years, he said.

To contact the reporters on this story: Daniel Petrie in Sydney at dpetrie5@bloomberg.net; Michael Heath in Sydney at mheath1@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

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