Heavy NSW loss shows Labor vulnerable in Queensland

Labor's decimation by New South Wales' Liberal Premier-elect Barry O'Farrell has shaken the nation's politics and may help push Queensland into the hands of a resurgent Coalition.

O'Farrell's huge victory at Saturday's state election will reverberate in Canberra, through both a stiffening of opposition to key elements of Prime Minister Julia Gillard's agenda, and ill omens for two of the independents who placed her in power.

Although federal and state politics are traditionally separate, anger at the former Labor NSW Government fuelled a swing by western Sydney voters against Gillard last August, and in the state election the Coalition campaigned against her proposed carbon tax.

O'Farrell has also given a warning that he may yet decide against other key Gillard reforms in health and education - which require support from the states - and said he would demand far greater federal funding for transport and other vital infrastructure. "We have not had a state government prepared to stand up to Canberra, and I will," he said.

Anger at NSW federal independent MPs Rob Oakeshott and Tony Windsor, two former Nationals whose role in placing Gillard in power infuriated their conservative electorates, was also evident.

In what has been seen as a backlash against the decision, independent Peter Besseling, who inherited Oakeshott's state seat of Port Macquarie, was hammered by a huge swing to the Nationals' Leslie Williams.

In Windsor's Tamworth base, independent Peter Draper was unseated by Nationals candidate Kevin Anderson.

Gillard congratulated O'Farrell on his victory and urged co-operation with Canberra, while senior ministers dismissed any federal implications of the 17 per cent swing that will hand him up to 68 seats and reduce Labor to about 21 MPs in the 93-seat Legislative Assembly.

"I don't think this will actually make much of an impact federally," Environment Minister Tony Burke told the Nine Network's Weekend Today programme. "This is something where it has been pretty clear for about 2 years that we were heading towards this result in NSW."

But federal Opposition Leader Tony Abbott said O'Farrell's landslide reflected federal policies affecting the cost of living, including proposed carbon and mining taxes. "The message that is coming loud and clear from the struggling families of NSW is that the carbon tax is toxic," he told Sky News.

Any federal aftershocks, especially if Queensland also falls to the Coalition and joins opposition to federal reforms, could be dangerous for Gillard's fragile minority Government.

A Newspoll in the Australian last week showed that even after recent recovery, Labor leads the Coalition by just two percentage points in the two-party preferred vote that decides Australian elections.

A Morgan poll at the weekend showed Labor in a far worse position: a two-party preferred vote of 45.5 per cent, nine points behind the Coalition's 54.5 per cent.

Labor's future in Queensland is also parlous, despite a boost from Premier Anna Bligh's performance during the floods and cyclone. Brisbane's Sunday Mail yesterday published a Galaxy poll showing the sudden deposing of Liberal National Party leader Lawrence Springborg by Brisbane Lord Mayor Campbell Newman has catapulted the Opposition into an election-winning lead. The poll gave the party a 58-42 per cent two-party preferred lead over Labor, and placed Newman ahead of Bligh as preferred Premier by 51 per cent to 38 per cent.

If Queensland follows NSW, only South Australia, Tasmania, the Northern Territory and the Australian Capital Territory would remain in Labor hands.

In NSW, O'Farrell said he would govern "for all people".

"Whatever your job, whatever your heritage or your religion or your lifestyle, we will deliver," he said. His priorities will include a new infrastructure authority.

Outgoing Premier Kristina Kenneally has opened a new leadership battle with her decision to move to the backbenches, and has said that Labor must face its defeat honestly and openly. "The truth is the people of NSW have trusted us with government for 16 years," she said. "They did not leave us, we left them."