Tue, Aug 24, 2010 - Page 5 News List

Australian leaders haggle to form new government

LABOR ON TOP Bookmaker Sportsbet said Labor had come from behind to become the thin favorite to win, with odds of A$1.80 against A$2 for the opposition

AFP , SYDNEY

Australia’s political leaders yesterday began horse-trading with a handful of independent members of parliament (MP) in a bid to form government after a cliffhanger poll that delivered the first hung parliament in 70 years.

Australian Prime Minister Julia Gillard, who suffered a fierce voter backlash, and opposition leader Tony Abbott both launched talks on a coalition administration with three key independent lawmakers who will likely hold the balance of power.

With both leaders claiming to have the mandate to lead a minority government, experts said that the nation’s future could hang in the balance for weeks or months, leaving stock and currency markets flat but cautious.

“The results on the market show the market understands that stable government is continuing,” Gillard said, adding that her Labor Party was best placed to form an effective and lasting coalition because it had won the popular vote.

“What that means is that the majority of Australians wanted a Labor government,” she told reporters in Canberra ahead of face-to-face talks with the independents and the Greens party.

Voters on Saturday turned on Gillard, who came to power in a party coup just two months ago, after a trouble-strewn campaign, stripping her of her strong majority.

Abbott, who said Gillard’s government had lost its legitimacy, also arrived in Canberra to meet the three “kingmakers” — Bob Katter, Tony Windsor and Rob Oakeshott — who are likely to decide who runs the nation.

Labor and the opposition Liberal/National coalition were each projected to take 73 seats in the 150-seat parliament, short of the 76 needed to rule in their own right, state broadcaster ABC said.

The independents — who all have past ties with Abbott’s party — vowed to stand “shoulder-to-shoulder” to produce a stable government, but kept their alliance options open as vote counting from Saturday’s poll continued.

“I don’t have to pick a red team or a blue team, I don’t have to pick Julia or Tony,” Oakeshott said, adding that he had spoken to both Gillard and Abbott by telephone yesterday. “What I do have to do is find a way to work together to get a process in place where we can have confident parliament with a clear majority.”

The extraordinary weekend election has triggered unusual political turmoil in Australia.

The vote heightens the surreal nature of the campaign after Gillard’s Labor deposed elected Australian prime minister Kevin Rudd in June and then bungled a range of policy initiatives.

The latest Australian Electoral Commission (AEC) tally gave her Labor Party 72 seats against 70 for Abbott’s conservative Liberal/National bloc, but the tallies kept shifting because of outstanding seats being too close to call.

Labor suffered a negative swing of about 5.4 percent, while the Greens enjoyed their best ever result as voters vented their frustration at the major parties’ lack of leadership on issues such as climate change, experts said.

The environment-focused Greens party won one seat — and the new MP indicated a preference to support Labor in a coalition — while the AEC listed four seats as “doubtful.”

Officials are counting 2 million postal and absentee votes, a process that could take 10 days to two weeks, but some experts said it could be up to three months before a new government is formed.

An expected fall in share prices failed to materialize, but mining stocks gained ground on expectations that Gillard’s controversial resources tax — vehemently opposed by Abbott — would not proceed if he takes power.

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