Australia's Labor Party to form government

Prime Minister Julia Gillard's Labor Party will form a minority government to rule Australia for a second three-year term, after two independent lawmakers joined her coalition Tuesday in the interest of stable government.
Prime Minister Julia Gillard speaks to reporters in Canberra on Tuesday after securing the ability to govern Australia for a second term. (Andrew Taylor, Reuters)

Prime Minister Julia Gillard will lead Australia's first minority government in 67 years after two independent lawmakers threw their support behind her centre-left Labor Party on Tuesday, ending two weeks of uncertainty left by national elections that ended on a knife-edge.

Australia's first female prime minister promised her government will be stable over the next three years, although the defection of a single lawmaker would bring down her administration.

"Labor is prepared to deliver stable, effective and secure government for the next three years," Gillard told reporters.

The independents' support means Gillard can continue with her plans to introduce a 30 per cent tax on the burgeoning profits of iron ore and coal mining companies and make Australia's biggest polluters pay for carbon gas emissions.

Labor gained the ability to form a government for a second term after two independent lawmakers — Tony Windsor and Rob Oakeshott — joined her coalition more than two weeks after elections failed to deliver a clear winner for the first time since 1940.

The decision Tuesday by Windsor and Oakeshott gives Gillard's party control of 76 seats in the 150-seat House of Representatives and makes another return to the polls unnecessary.

Gillard has rewarded the two rural-based lawmakers by promising $9.53 billion in new investment in rural schools and hospitals.

She also announced she offered Oakeshott a cabinet post, which he had yet to accept. Windsor had said he did not want such a job in the government.

Gillard also said she would keep her promise to make her predecessor, Kevin Rudd, a senior cabinet minister.

Party power-brokers dumped Rudd for Gillard in an internal mutiny in June in a bid to improve Labor's standing in opinion polls.

Rudd loyalists were suspected to be behind a series of damaging leaks to the news media against Gillard during her election campaign. Labor lost 11 seats in the election, many of them in Rudd's home state of Queensland.

Bob Katter, an independent who sided with opposition leader Tony Abbott's conservative Liberal Party, said Tuesday he would have supported Labor if Rudd were still prime minister.

Gillard said voters sent her a message by almost making her government the first since 1931 to lose power after a single term.

"What they are asking us to do is not to become waylaid in partisan bickering but to build for the future," she said.

Abbott's coalition won 73 seats and with Katter's support commanded 74 seats. Abbott said Tuesday he was disappointed by the result, adding the government should be brought down if it proves incompetent.

Aug. 21 elections were the first since 1940 to fail to deliver a clear winner. That parliament initially chose a conservative minority government, which was brought down when two independents switched allegiances to Labor.

Independents Rob Oakeshott, second from right, and Tony Windsor, right, celebrate with senior government minister Anthony Albanese, left, and senior opposition member Chris Pyne, second from left, after an agreement, which will give independents a greater role in the new parliament, was reached. ((Andrew Taylor/Reuters))
Windsor and Oakeshott, who have both championed better communications infrastructure for rural areas, said Labor's plan to introduce a $40.93 billion high-speed optical fibre national broadband network was a major factor in their decision.

Abbott's Liberal Party had promised a smaller, slower $5.72 billion network with a range of technologies, including optical fibre, wireless and DSL.

"What this is, is a hard decision," Oakeshott told reporters. "There's no question about that … . This could not get any closer."

Windsor said he believed Gillard was more likely than Abbott to work constructively with the independents and govern for a full three-year term rather than call an early election.