AFP

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

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

Some 600,000 Australians — four percent 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 Gillard promised to legislate the reforms by May and introduce them by 2014 as part of a deal with Wilkie to win his support for her government.

But under pressure from the pub and club industry, which pays hefty state government charges to have the m o n e y - s p i n n i n g 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.

A decision on its roll out will be deferred until 2016.

Wilkie said he had been let down.

“I regard the prime minister to be in breach of the written agreement she signed, leaving me no option but to honour my word and end my current relationship with her government,” he said.

“We should be able to trust our politicians to keep their word. Frankly a deal is a deal.” Gillard defended her backdown, saying Wilkie’s proposal would not have made it through parliament.