SYDNEY, Aug 20 (Reuters) - Kathy Chalker, a Sydney art studio owner, is just the sort of voter Australian Prime Minister Scott Morrison needs to win the country"s next election - a long-time conservative party supporter with a small business in a swing seat. But Chalker has already decided to vote Morrison out. With her business closed indefinitely under a COVID-19 lockdown in Australia"s biggest city, Chalker blames Morrison"s government for what she sees as the blundering management of a vaccine rollout that is behind almost every other developed nation. "Why weren"t they prepared? We were all watching this happening around the world - it"s pure incompetence," Chalker told Reuters from her home in Sydney"s western suburbs, the epicentre of a COVID-19 outbreak that is the country"s worst since the pandemic began. Chalker is not alone in her sentiments. On current polling, Morrison"s Liberal Party-led Coalition would likely lose its thin majority in the country"s 151-seat parliament at an election that must be held by the middle of next year. Australia"s exposure to the coronavirus pandemic remains small compared to many other developed nations, with a total of just over 41,400 cases and 971 deaths, and for several months it appeared to be emerging from the crisis. But the fast-moving Delta variant has exposed a major weakness; the country"s slow-moving vaccine programme. "The problem is Morrison set expectations so high," said John Hewson, a former Liberal Party leader. "Australia was riding high with few if any cases, and now he has to manage these lows." The country recorded 754 cases on Thursday, the highest single-day increase, since the previous peak a year ago. The bulk of those were in Sydney"s west, which includes the federal electorate of Lindsay, where Chalker lives and works. Sydney"s west is home to around 2.5 million people and represents the country"s third largest economy after Sydney"s central business district and the city of Melbourne. Anger is growing in the region that a two-month lockdown does not appear to have curbed the Delta outbreak, but has severely impacted local businesses. Chalker voted for the Liberal Party at the 2019 election but believes they have overlooked small businesses during the current lockdown. "My whole family feel the same way. I have adult sons and they are saying, "Yep, we"ll vote for what you need mum"." With more than half Australia"s population of 25 million living under some form of lockdown, economists say the national economy is now at risk of falling into its second recession in as many years. Residents in Lindsay and surrounding electorates are subject to the most stringent measures in the country, with most confined to their homes except for exercise and buying essential supplies. "The people here are the engine of Australia; they need to be working, many live hand-to-mouth," said Jody Reeves, another Lindsay resident, who describes herself as a swing voter. "Morrison is going to need a strong advertising campaign to make us forget, but I"ll be here to remind everyone what went wrong." VACCINE FALLOUT While Australia"s policy responses to the pandemic are a mix of state and federal responsibility, Morrison"s government has taken much of the blame as the organizer of the national vaccine programme. Just 30% of people aged 16 and over have been fully vaccinated after a big push in recent weeks to improve take-up. The delays were partly due to changed health advice over the use of the AstraZeneca (AZN.L) vaccine, which was to be the backbone of the country"s immunisation programme, due to rare cases of blood clots among some recipients. Australia has since scrambled to boost its supplies of Pfizer Inc"s (PFE.N) vaccine and reversed some advice on AstraZeneca. Representatives for Morrison and the office of Liberal MP Melissa McIntosh, who represents Lindsay, did not respond to questions. Morrison has said that government measures have kept people in jobs and businesses afloat and have helped Australia avoid the fatalities suffered elsewhere. Under Australian rules, the government must call and hold an election by May next year. It is widely assumed it will be done so as late as possible to allow the vaccination programme to advance, and travel reinstated, lifting the public mood. In doing so, Morrison will hope to retain the support that propelled him to a poll-defying victory in 2019. Morrison carved out a narrow path to victory at that election via marginal seats in Queensland and Western Australia - where mining and farming are dominant industries - along with snatching Lindsay from the opposition Labor Party. Labor enjoys strong support in Victoria, Australia"s second most populous state, and could return to power for the first time since 2013 should it win some of those marginal contests, with Lindsay firmly in sight. Reporting by Jonathan Barrett; editing by Jane Wardell Our Standards: The Thomson Reuters Trust Principles.