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Updated: January 22, 2012 17:26 IST

Labour party loses key supporter

AFP
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Australian Prime Minister Julia Gillard
— Photo: AP Australian Prime Minister Julia Gillard

The power base of Australia's ruling Labour Party was rattled on Saturday when a key independent MP withdrew his support after Prime Minister Julia Gillard broke an agreement on gambling reforms.

Ms. Gillard's minority government held power with a wafer-thin majority of just two seats after deadlocked elections last year and this is now down to one after Andrew Wilkie cut ties.

It followed Ms. Gillard on Saturday announcing a watered down reform plan to tackle problem slot machine gambling at pubs and clubs.

Some 600,000 Australians — four per cent of the adult population — are estimated to play the poker machines at least weekly, with about 95,000 classed as problem gamblers in a study published by the Productivity Commission.

The commission recommended imposing loss limits to address the issue and Ms. Gillard promised to legislate the reforms by May and introduce them by 2014 as part of a deal with Mr. Wilkie to win his support.

But under pressure from the pub and club industry, which pays hefty state government charges to have the money-spinning machines and says the reforms will cut their revenue, she has toned it down and pushed back the timetable.

Now, the government intends to only introduce a trial to require gamblers to preset a limit on what they are prepared to lose on high betting machines from the start of 2013.

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