CANBERRA: The ruling Labor Party is preparing for a severe blow to morale in the run-up to this year's national election, with the state Government in Queensland facing the possibility of losing office in a by-election next month.
A Labor loss in the by-election will see the state Government lose its one-seat majority and will probably lead to the conservative parties forming a government.
Coming just weeks before Prime Minister Paul Keating is expected to call an election, such a result will give further momentum to the conservatives nationally.
The Labor Party won the state election in Queensland in July last year, but in a knife-edge result, its majority was reduced from a comfortable 19 seats to just one.
This precarious hold on power was further eroded after the Court of Disputed Returns found last December the result in the electorate of Mundingburra, in Townsville, North Queensland, was invalid because 39 votes were not counted.
Most were votes by Australian soldiers on a peace-keeping mission in Rwanda. The court found their votes might have had a decisive effect on the outcome of the election. Labor won Mundingburra by just 16 votes.