Australia's ruling Labor could retain power with slim majority in May vote, poll shows

SYDNEY (Reuters) - Australia's ruling centre-left Labor party could retain power with a slim majority after a national election on May 3, a widely-watched poll said on Monday, marking a reversal of sentiment from February, when voters wanted it out of office.

A Newspoll survey conducted for The Australian newspaper showed support for the Liberal-National opposition coalition has fallen below levels seen at the last election in 2022, while approval for Prime Minister Anthony Albanese has ticked up.

The election could also deliver a hung parliament with Labor likely forming a minority government, the poll said.

Labor is ahead of the opposition 52-48 on a two-party preferred basis under Australia's preferential voting system, where votes from minor parties are redistributed until a winner is elected.

Albanese's approval rating has lifted to -4, aligning with an improvement in Labor's rise in support, from -20 in February, his worst as prime minister. He has also extended his lead as the preferred leader, while opposition leader Peter Dutton's approval fell to among the worst of his term.

The poll, conducted among just under 1,300 voters, follows a week dominated by market turmoil triggered by U.S. President Donald Trump's tariff plans, and after the opposition abandoned plans to force federal workers to return to full-time office working.

The United States, which enjoys a trade surplus with ally Australia, imposed a 10% "reciprocal" tariff, prompting Albanese to describe it as "not the act of a friend".

The return-to-office policy was seized upon by Labor, which said it would increase commuting costs in a campaign that has been dominated by cost-of-living concerns. It has also recently rolled out several measures aimed at pleasing families grappling with high living costs, lifting voter support.

Despite the recent surge in polling for him and his Labor party, Albanese on Monday downplayed the latest survey and said the campaign would be very close.

"We have a mountain to climb," Albanese told reporters.

"I am certainly not getting ahead of myself. It's hard to win an election if you look around the world, it has been a difficult time to be in government because of global inflation."

(Reporting by Renju Jose in Sydney; Editing by Jamie Freed)