Australia PM faces elections in home state

By Mark Bendeich

SYDNEY (Reuters) - One of Australia's key mining states, Queensland, Monday called a snap election for March 21 in a vote that could help shape Prime Minister Kevin Rudd's thinking on the merits of an early general election.

Queensland is Rudd's home state and heavily reliant on mining, putting it on the front line of the global financial crisis as export demand tumbles and jobs are shed. State polls were not due until September but unemployment is expected to worsen by then.

Queensland Premier Anna Bligh, who belongs to Rudd's ruling Labor party, said in a video statement posted on her personal Web site that Queensland had been hit hard and fast by the crisis and voters should choose the government they wanted to deal with it.

"We are in unprecedented times," she said. "The global financial crisis has come to Queensland faster and with deeper consequences than anyone could have predicted. The sheer scale of the global crisis has become clearer with every single day."

Political scientist Rick Kuhn said the state election was probably timed to take advantage of Rudd's recently enacted A$42 billion ($27.1 billion) stimulus package, which is expected to start flowing into people's pockets from early March.

BEFORE CONDITIONS WORSEN

The Queensland government was also looking for a new mandate before economic conditions worsened, a tactic Rudd might also favor at the national level if his party retains power easily in his home state, said Kuhn, of Australian National University.

"I am sure he would like to go early," Kuhn added.

Rudd is not due to call national polls until 2010, when currently economists expect an upturn, but there is a risk the global economy may not revive by then. There are fears Australia could be the last in and last out of a global recession.

So far, the impact of the crisis has been relatively muted in Australia, which went into the crisis with a lot of momentum and is still forecast to see some economic growth this year. Rudd is also injecting an unprecedented sum of cash into the economy.

But the two main mining states of Queensland and Western Australia do not bode well, as export demand from China, the country's biggest trading partner, ebbs.

Queensland's jobless rate jumped to 4.4 percent in January from 3.9 percent in December, still below the 4.8 percent national jobless rate but accelerating at a much faster pace.

Friday, credit-rating agency Standard & Poor's cut the state's long-term rating to AA+ from AAA, citing a deterioration in the state's budget. It said the outlook was stable.

Queensland's conservative opposition needs to win 22 extra seats to claim a majority in the 89-seat state parliament.

($1=1.55 Australian Dollar)