P 190653Z MAR 09
FM AMCONSUL SYDNEY
TO SECSTATE WASHDC PRIORITY 8847
INFO AMEMBASSY CANBERRA PRIORITY 
AMCONSUL MELBOURNE PRIORITY 
AMCONSUL PERTH PRIORITY

C O N F I D E N T I A L SYDNEY 000070 
 
 
E.O. 12958: DECL: 03/18/2019 
TAGS: PGOV PINR AS
SUBJECT: LABOR COULD FALL IN QUEENSLAND STATE ELECTION 
 
REF: A. 07 SYDENY 409 
     ¶B. 08 SYDNEY 142 
 
Classified By: Political Officer Casey Mace for reasons 1.4 (b) and (d) 
 
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Summary 
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¶1. (C/NF) Queensland's Labor state government is dangerously 
close to losing reelection in the state's March 21 polls. 
The Labor party has dominated state politics for the last 
eight years, winning three consecutive elections and amassing 
a commanding 15-seat majority in Parliament.  Public opinion 
polls, however, reveal voters are tired of problems in the 
state-run health system and concerned about a state budget 
that just plunged into deficit.  In contrast to previous 
elections, a more unified, better organized, and well 
resourced opposition is providing the voters with a 
legitimate alternative.  Moreover, a disciplined campaign by 
the opposition Liberal National Party (LNP) gained momentum 
early, but it will need to swing close to eight percent of 
voters on election day.  Although the LNP needs to win 20 
additional seats -- nearly doubling its 25-seat count in 
parliament -- to gain outright control of government, a win 
of 18 seats could allow it to form a minority government with 
two conservative-leaning independent candidates likely to win 
their contests.  In the end, many observers believe the 
margin is too large for the surging opposition, and the Labor 
party will scrape back into power.  Even if Bligh's 
government scrapes out a win, the expected swing against 
Labor will likely dampen speculation that Labor Prime 
Minister Rudd will call an early national election.  End 
Summary. 
 
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The Snap Election 
----------------- 
 
¶2. (SBU) This is Premier Anna Bligh's first election at the 
helm of the Labor Party.  After winning three elections, 
popular Labor Premier Peter Beattie retired from politics and 
handed over the reins to Bligh, his Treasurer and handpicked 
successor, in 2007 (ref A).  An able administrator, Bligh 
enjoyed consistently high approval ratings through the end of 
last year.  Her cabinet has not been marred by any major 
scandals, and the state economy had been growing at healthy 
clip with unemployment below already very low national 
levels.  When the global economic downturn started to slow 
business growth and cut into government revenue early this 
year, however, Bligh and her treasurer Andrew Fraser made the 
controversial decision to maintain government spending 
priorities at the risk of a forecasted budget deficit.  The 
decision prompted Standard and Poors to downgrade 
Queensland's credit rating from AAA to AA -- making it the 
first Australian state to suffer a credit downgrade.  Three 
days later, the Premier decided to call a snap election on 
February 27, nearly six months before the end of her term, 
because she said she needed a renewed mandate to manage the 
state under deteriorating economic conditions.  Most 
observers pointed out that the March 21 election is safely 
scheduled two months before Bligh has to unveil the official 
budget in deficit, which could be worse than expected, and 
even harder to defend on the campaign trail. 
 
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The Opposition 
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¶3.  (SBU) In contrast to the three previous elections, 
Queensland's Labor government is facing a unified and 
organized opposition.  Unlike other states, Australia's two 
main conservative parties, the Liberal Party and National 
Party, have fought for primacy within their coalition in 
Queensland.  The National Party has always been the senior 
partner at the state level, but in recent years, the Liberal 
Party has been the senior partner at the Federal level.  As a 
result, the coalition has had trouble consistently presenting 
one leader and one platform to the electorate.  Last year, 
however, the Liberal and National Parties formally merged in 
Queensland under a rebranded Liberal National Party (ref B). 
Although some Liberal party members grumbled the merger was a 
takeover, a majority of the rank and file in both parties 
supported the move.  The Liberal National Party (LNP) quickly 
consolidated resources and launched a rebranding campaign at 
the end of 2008 that slightly lifted the conservatives' 
dismal ratings in the polls.  LNP leader Lawrence Springborg 
has been actively traveling the state to raise his profile as 
the leader of the new party, and to shake his old image as 
National Party leader who lost two state elections at the 
head of a more divided Coalition.  Since the merger, the LNP 
has avoided destabilizing internal power struggles. 
 
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The Campaigns 
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¶4. (C/NF) At the end of the first week of the campaign, the 
LNP shocked most observers by pulling even with the Labor 
party at 50 percent in the polls.  One of Labor's campaign 
organizers admitted that the LNP's aggressive campaign start 
outperformed Labor.  He pointed out that the LNP beat the 
Labor party to voters' mailboxes, an important tactic in 
Australian elections, by sending direct mail campaign 
literature with mail-in ballots to registered voters in its 
database.  The Labor party, he said, had taken a week longer 
to mail its literature to voters.  LNP television ads 
outnumbered Labor party ads by three to one the first week as 
well.  Labor party state director Anthony Chisholm told us 
March 4 that he believed his party would be outspent by the 
opposition for the first time in many elections.  He 
explained that the Labor Party's primary funding vehicle, an 
investment fund seeded with capital raised by the sale of 
formerly owned radio stations, had generated significantly 
smaller revenue this year as a result of the financial 
crisis.  Moreover, the global economic downturn has reduced 
the size of campaign donations from businesses. 
 
¶5. (C/NF) Chisholm said that the two main campaign issues 
have been economic management and healthcare.  The opposition 
has a decisive edge on healthcare, according to polls.  A 
series of news stories over the last year have exposed a 
shortage of beds and nurses in many regional hospitals, and 
Premier Bligh made the unpopular decision at the beginning of 
the year to close a children's hospital in north Brisbane to 
consolidate resources into a larger children's hospital in 
south Brisbane.  The Labor party had been hopeful that it 
could own economic management as an issue, arguing the need 
for experienced and proven leadership during a time of global 
economic recession.  However, the LNP has been relatively 
effective in neutralizing the issue by criticizing the 
government for running a deficit and pledging to bring more 
austerity to the budget.  Chisholm said that Labor's other 
traditionally strong issues like the environment and 
education have not rated high in voter polls. 
 
¶6.  (C/NF) Despite surging in the polls and sustaining a 
disciplined campaign, the LNP still has to convince enough of 
the electorate it is prepared to run the state.  Federal LNP 
MP from the Brisbane area, Michael Johnson, told us March 4 
that the state LNP "lacks the punch of artillery to get 
across the line."  The state director of a leading business 
organization, Dave Edwards, told us in a separate meeting on 
March 3 that the business community has not been convinced 
the LNP can win the election.  As an example, he said that he 
had to beg and cajole executives to fill a 140-seat breakfast 
event with LNP leader Lawrence Springborg on March 3, where 
he announced an important element of his economic plan for 
the state.  In contrast, Edwards said that he filled nearly 
250 seats with little effort for an event with the Labor 
Minister for resources later in the week.  And although 
support for both parties is evenly split, Bligh has 
consistently outpolled Springborg by more than 10 points as 
the voters' preferred premier. 
 
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The Outcomes 
------------ 
 
¶7. (C/NF) The LNP must hold all of its 25 existing seats and 
win an additional 20 seats to take control of government. 
Although an electoral redistricting in 2008 turned three LNP 
seats into notional Labor party seats based on 2006 election 
results, the LNP should be able to hold the seats in this 
election.  As a result of the district boundary changes, the 
Labor Party is incumbent in 57 seats and stands to gain two 
new seats with high Labor party margins.  A net loss of 15 or 
more of these seats would push Labor below the 45 seats 
necessary for outright majority in the state parliament.  At 
least 11 Labor seats are vulnerable.  The LNP is in striking 
distance of at least five Labor seats in the Brisbane and 
Gold Coast area, which comprise the highly populated 
southeastern corner of Queensland. Another six Labor seats in 
coastal and regional Queensland are within the LNP's reach. 
So the LNP not only needs to make gains all throughout the 
state, it needs to win another four Labor seats that are held 
with margins of 5 percent or greater.  The state director for 
one of the largest labor unions, Andrew Dettmer, told us 
March 2 that he believes Labor will lose at least 5-6 seats. 
Labor party consultant and campaign organizer Dave Nelson had 
a more sober outlook on March 3.  He said that he could see 
the Labor party losing at least seven, and possibly all 11 of 
the vulnerable seats, but Labor may be able to hold off 
defeat in the remaining four seats. 
 
¶8. (C/NF) Under the new electoral boundaries, five seats are 
held by independent MPs.  The LNP has a good chance of winnig 
two of these seats according to observers, but at least three 
independents are likely to return to parliament.  The 
presence of independent MPs creates the prospects for a hung 
parliament in which neither major party has an outright 
majority.  Observers believe that at least two of the three 
remaining independent MPs would side with the LNP, but they 
would each have the power to exact a hefty political price 
for support and would have disproportionate influence over 
legislation. 
 
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Comment 
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¶9. (C/NF) Neither candidate has proved to be electric on the 
campaign trail. Bligh is articulate and smart on policies, 
but she does not have the same media flair or campaign 
charisma of her predecessor Peter Beattie.  Springborg is 
energetic but less articulate.  Exceeding relatively low 
expectations, Springborg has closed the gap as preferred 
Premier, but Bligh still remains more popular.  The LNP 
sustained a disciplined campaign after a strong start, making 
the contest between the parties very, very close.  Labor may 
just avoid defeat, but it will emerge bruised and much 
weaker.  Although Prime Minister Rudd's federal Labor 
government remains popular, it will not take heart from the 
Queensland election.  A significant swing against Labor in 
Queensland, following swings against Labor in Western 
Australia and the Northern Territory last year, will give 
pause to federal Labor party strategists contemplating the 
merits of an early election for Prime Minister Rudd this 
year.  On the other side of politics, the merger experiment 
between the conservative parties into one unified LNP should 
endure in Queensland; the LNP's success in these elections 
should lead counterparts in other states to consider the 
merger path more seriously.  In the meantime, however, the 
federal opposition Coalition rife with divisions between 
outspoken National MPs and Liberal MPs could continue to have 
trouble reconciling itself with its merged identity in 
Queensland at the next federal election.  End Comment. 
 
 
FERGIN