Support tumbles for Gillard in poll

The latest Newspoll, published in The Australian, shows a five-point drop in Ms Gillard's standing as preferred Prime Minister. Source: The Daily Telegraph

SUPPORT for Julia Gillard as Prime Minister has tumbled to a six-month low as the latest opinion poll shows Labor would be thrashed if a federal election was held now.

But the Greens have enjoyed a small rise in support after announcing a split with Labor last week.

The latest Newspoll, published in The Australian, showing a five-point drop in Ms Gillard's standing as preferred PM is likely to spark a new round of leadership speculation.

In November last year Ms Gillard held a 14-point lead as Better PM but today's poll has Liberal leader Tony Abbott ahead by four points - with a lead of 40 to 36 per cent.

Today's Newspoll shows the Greens rose two points to 11 per cent.

Support for Labor fell one point to 31 per cent - its lowest level in Newspoll since July last year and in line with last week's Fairfax Nielsen Poll which showed Labor at 30 per cent.

The Coalition's primary vote also slipped one point to 47 but it would easily win an election held now with the two-party vote after preferences showing the Coalition ahead 55 to 45 per cent.

The Gillard Government also faces the prospect of a $15 billion Budget black hole as businesses struggle with the end of the mining boom and the slowdown in spending, economists warn.

The latest forecasts show the Budget deficit may be even bigger than originally imagined.

Despite the introduction of some tough cost-cutting measures, the latest research from global bank UBS forecasts the Federal Budget in May will show a $12 billion black hole in revenues and cost overruns of about $3 billion.

The biggest pain is coming from the expected $8 billion drop in taxes from the corporate sector.

UBS strategist Matthew Johnson said the mining sector had been the problem child of the crash in corporate tax receipts as commodity prices fell in the back half of 2012.

And this crash in revenues is outside of the Gillard Government's flawed mining tax, which has raised just $126 million in its first six months of operation. Treasury had forecast it would raise $2 billion in its first year.

But Mr Johnson said the sharp slowdown in business revenues meant that the second half of the financial year might generate even bigger Budget problems for Treasury.

- with Stephen McMahon

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