Australia state election bodes ill for Abbott government

By Morag MacKinnon PERTH (Reuters) - Australia’s opposition Labor party pulled off a huge electoral turnaround in a key state on Saturday, positioning it to oust the ruling Liberal-National party in a voter backlash that threatens the future of Prime Minister Tony Abbott. With 70 percent of the vote in, the conservative government that has ruled Queensland state with a massive majority was one seat away from losing office after one term. The voters' swing towards Labor was credited to the unpopularity of the ruling party's plan to sell off public assets and cut government services, as well as the rising unpopularity of Abbott, the national conservative leader. Late on Saturday , Labor was estimated to have secured 44 seats, just one shy of the 45 needed to govern in the 89-seat legislative assembly. The Liberal-National party (LNP) looked set to hold on to 33 seats, with three seats won by minor and independent parties and nine still undetermined. The early results are a massive turnaround from the majority the LNP secured when it won office in 2012, winning 78 of the 89 seats in the Queensland parliament - the largest political majority in Australia’s history. "It's still too close to call, but I am very hopeful that we'll be able to form government," Labor leader Annastacia Palszczuk told supporters. While state elections do not determine the national government, the swing against the LNP in Queensland follows a string of losses in local contests and bodes badly for Abbott, whose popularity has tanked in recent months. With just over a year in office, Abbott has seen his leadership questioned and most recently came under fire for his unpopular decision last week to award a knighthood to Prince Philip, husband of Queen Elizabeth, a knighthood. A Labor government in Queensland would be a blow to Australia’s A$130 billion (67 billion pounds) plan to privatise state-owned assets, which the Labor party campaigned strongly against. The LNP had promised a raft of infrastructure upgrades funded by the A$35 billion sell-off involving ports, electricity generators, an electricity distribution network and a water distribution company. The Queensland result also threatens Indian conglomerate Adani Enterprises' $7 billion Carmichael coal mine project in the state’s Galilee Basin. The LNP put development of the basin at the heart of its bid for re-election and had promised to take a minority stake in the railway line needed to bring the coal to port. The Labor party said it would not subsidise the rail line and has challenged assertions about the amount of revenue the mine would generate. (Editing by Kay Johnson)