Australia's Labor to scrape back into power - poll

SYDNEY (Reuters) - Australian Prime Minister Julia Gillard's Labour government will be battered at Saturday's election but scrape back into office for a second term with a narrow four-seat majority, opinion polls showed on Wednesday.

With just three days of campaigning left in the tightest election in decades, Labor's floundering support with voters seems to have stabilised while the conservative opposition is slipping in key eastern states which will decide the election.

The latest Reuters Poll Trend shows Labour marginally ahead, but with the possibility of a minority government after the August 21 election. In the event of a hung parliament, three rural independents are expected to decide which party forms government.

A Labour victory would see a 30 percent profits-based tax imposed on coal and iron ore miners, and possibly a carbon trading scheme to combat climate change from 2012. It would also ensure construction of a $38 billion fibre-optic national broadband network, opposed by the conservatives.

"I think this will be the closest election since 1961, which was a cliff-hanger. I do think this will go down to the wire," Chris Bowen, Labor's campaign spokesman, said on Wednesday.

Labour could lose a massive 15 seats but just be returned to office with a four-seat majority at Saturday's election, said an opinion poll of 28,000 voters.

The JWS Research poll in The Sydney Morning Herald on Wednesday found Labour was ahead of the Liberal-National opposition in key marginal seats 79-68, but would be hammered by disgruntled voters.

It said Labour would lose 15 seats but gain six conservative seats, leaving it with a net loss of nine and a narrow victory.

LABOUR SET FOR NARROW VICTORY

A Newspoll in The Australian newspaper found Labor's support levelling but the opposition slipping in the key resource state of Queensland and the most populous state, New South Wales.

Labour has been struggling in Queensland as well as resource-rich Western Australia (WA) due to opposition to its planned resources tax, with local mine workers fearing job losses as Gillard flew to the state for last-minute campaigning.

Secret Labour polling showed three marginal electorates in WA were 50-50, with the state holding the key to a Labour or conservative government, The West Australian newspaper said.

WA-based iron ore magnate Andrew Forrest, who heads Fortescue Metals, invited Gillard to an open discussion on the proposed mining tax, although Labour strategists believe the issue has cooled since it struck a deal with the three largest companies, BHP, Rio Tinto and Xstrata.

A separate Galaxy Poll in Queensland showed Gillard's party was in danger of losing six seats, with Abbott gaining ground on the prime minister, as both prepared for a public grilling from swing voters in the battleground state later on Wednesday.

Underpinning Labor's last-minute support in key rural seats has possibly been its $38 billion fibre-optic national broadband network which promises high speed Internet and a plan for medical clinics in rural towns struggling to attract doctors.

The opposition has charged Labour with using both policies to win over, or "pork-barrel," marginal seats.

"We think the economy is the key issue of this campaign, including our plans for superannuation, for broadband, for education," said Labour spokesman Bowen.

Gillard on Monday placed financial competence at the centre of her campaign and cast conservative opposition leader Tony Abbott as a jobs and investment risk, prompting the opposition to outline its economic plan and reassure the central bank of support for its inflation target of 2-3 percent.

But while the Liberal-National opposition support is slipping it is not translating into direct support for Labour, but the small Greens party, another poll, Newspoll, showed on Wednesday.

The Greens are polling nearly double the level at the last election in 2007, it said, and are on course to gain the balance of power in the upper house Senate and be policy kingmakers in the next parliament.

(Additional reporting by Rob Taylor in Canberra; Editing by Miral Fahmy)