Budget blues put Labor out of favour

AS Australian voters turn against the Federal Labor Government in unprecedented numbers after last week's budget, the Government's strategy to ram its controversial tax rises through the Senate is coming unstuck.

With opposition to the budget so intense, the government of Prime Minister Paul Keating has apparently lost its economic credibility. Australia faces weeks of political turmoil and even the chance of a dissolution of both houses of Federal Parliament anda snap election.

The August 17 budget, which undermined its own tax cuts for low-income earners with a range of tax and price rises, including big hikes in wine, fuel and cigarette prices, has left voters outraged. Early polls showed most believed they would be worse offand wanted the budget blocked in the Senate, but a Newspoll commissioned by The Australian and published yesterday, also found a huge swing against Labor.

It showed support for Labor was at its lowest ever - just 31 per cent, compared with the Liberal-National coalition's 54 per cent.

Labor has slumped 10 per cent since the budget, the biggest such swing since Newspolls began. And for the first time in Newspoll budget polling, a majority believed this Labor budget would be bad for the economy.

The Government, which controls the lower house but not the Senate, needs the support of the Democrats and Greens who hold the balance of power there to pass its legislation.