In blow for Turnbull, Labor favoured to return to power in Queensland

Queensland Premier Annastacia Palaszczuk's party has been projected to win the highest number of seats in last Saturday's snap election. PHOTO: FACEBOOK/ANNASTACIA PALASZCZUK MP

SYDNEY (BLOOMBERG) - Queensland Premier Annastacia Palaszczuk's Labor government is favoured to return to power in the north-east Australian state, dealing a blow to Prime Minister Malcolm Turnbull and raising doubts about the future of a US$12.6 billion (S$16.97 billion) coal mine.

Analysts projected her party would win the highest number of seats in Saturday's (Nov 25) vote, with the Australian Broadcasting Corp predicting it may win enough to form a majority government in the 93-seat Parliament.

The ABC reported Labor had taken 43 and will likely gain at least another four, with the Liberal National Party set for as many as 41 seats. Vote counting may continue for days before the outcome is clear.

"As soon as every vote is counted, then I will be talking to my colleagues about the future ministry," Ms Palaszczuk, 48, said on Sunday. "We are confident of a Labor majority."

If returned, Ms Palaszczuk will be the first female leader in Australian history to win two state elections.

The result spurred infighting within Mr Turnbull's federal Liberal-National coalition, which trails in opinion polls to Labor, emboldening some in his alliance who support a parliamentary inquiry into allegations of impropriety in the banking industry.

The result showed the coalition needed to do more to "stand up more for conservative values", Nationals federal lawmaker George Christensen said. "A lot of that starts with the Turnbull government, its leadership and its policy direction."

Mr Christensen is one of several federal Nationals who support the banking probe - a move opposed by Mr Turnbull.

A parliamentary vote into whether the inquiry will proceed could be held as early as next week, and Mr Turnbull may struggle to stave it off after his government lost a majority due to the absence of two coalition lawmakers who were disqualified because they held dual nationality.

In Queensland, uncertainty over the final result raises questions over the future of Adani Group's plan to build a US$12.6 billion coal mine in the resource-rich state, Australia's third-largest by population. The main parties disagreed on whether to back federal funding for a new rail link to carry coal to the coast.

The Labor government has vowed to reject A$900 million (S$920.84 million) in federal funding should it be returned.

Supporters say the mine will open up the Galilee Basin, a coal-rich region bigger than the UK, and create thousands of new jobs in Queensland, which has been hit hard by the end of a decade-long mining-investment boom and has the nation's second-highest unemployment rate.

While more than 30 per cent of voters picked minor parties, the election proved disappointing for the anti-Muslim immigration One Nation party, which had been expected to pick up a clutch of seats in the weekend's election.

Yet leader Steve Dickson failed to win his seat, dashing its chances of becoming a kingmaker for a minority government.

The ABC's election analyst Antony Green said One Nation and the Greens will win one seat each, with Katter's Australian Party taking two seats and one going to an independent.

Ms Palaszczuk said she's not thinking about striking any deals with other parties after facing questions that she may need to if she does not secure a majority government. While there remains a chance that Labor would need an alliance with the Katter's Australian Party in that event, she had ruled out linking up with One Nation.

"More than likely Labor will hold on to government," said Dr Zareh Ghazarian, a Melbourne-based political analyst at Monash University. "This is a significant achievement for Palaszczuk. Her political stocks will go up following this performance."

LNP leader Tim Nicholls, 52, said more than 360,000 postal votes still had to be counted, and the result still isn't final.

"The Premier has not won a majority in her own right," he said on Saturday night. "But let's be realistic, nor have we."

While Mr Turnbull has tried to distance himself from the vote, saying the election didn't reflect on his government because it was fought on state issues, Labor leader Bill Shorten was quick to cast blame.

"He just doesn't get it," Mr Shorten said on Monday. "There are issues not just in Queensland but across Australia, which I think Australians are increasingly frustrated about the federal government."

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