Australia PM surprised by Labor rout in state election Australian Prime Minister Julia Gillard (pictured in February) said on Monday she w...

Australia PM surprised by Labor rout in state election

Australian Prime Minister Julia Gillard (pictured in February) said on Monday she was surprised at the scale of her ruling Labor party's defeat in state elections, widely seen as a dire warning for her fragile government. (AFP Photo)

Australian Prime Minister Julia Gillard said on Monday she was surprised at the scale of her ruling Labor party's defeat in state elections, widely seen as a dire warning for her fragile government.

Labor, which has ruled for 20 of the past 22 years in northern Queensland, suffered an unprecedented rout at weekend elections, taking so few seats that its official party status in the state is under threat.

Premier Anna Bligh, who rose to prominence for her handling of the twin flooding and cyclone disasters in northern Australia last year, narrowly held onto her own seat but resigned Sunday due to the scale of Labor's loss.

Gillard said the "expectations were that Labor was going to be defeated and soundly defeated" but the "dimensions of this defeat took me by a bit of surprise," describing it as a "deep disappointment."

When Labor came to power nationally in 2007 it also controlled all the state parliaments, but since then the four major east and west coast states have fallen to the Liberals, complicating passage of its policies and reforms.

After the Queensland vote, Labor is expected to have just seven seats in the state to the conservative Liberal National Party's 78.

"For the federal government, whilst elections turn on their own issues and own questions, inevitably there will be discussions about what are the implications," Gillard said on the sidelines of a nuclear summit in Seoul.

"Since I first became prime minister... I've never underestimated the degree of (the) challenge for federal Labor and I don't underestimate it now.

"We've got a lot of hard work to do for the people of Queensland and with the people of Queensland."

Gillard said next year's national election would be decided on its own issues including sweeping taxation reforms to the powerful mining industry and a levy on pollution for major emitters.

"The (Queensland) fight was overwhelmingly on state issues, there was clearly a major 'it's time' factor after Labor having government for so long," she said.

"People will make their decisions (in 2013), for us it's about... knuckling down, getting on with the job," she said.

(Agencies)