Australian leaders horse-trade to form government after polls

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

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 warned 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,” Ms Gillard said, adding her Labour 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 Labour government,” she told reporters in Canberra ahead of face-to-face talks with the independents and the Greens party.

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

Mr Abbott, who says Ms Gillard’s government has 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.

Labour 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 Mr 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,” said independent Rob Oakeshott, adding that he had spoken to both Ms Gillard and Mr Abbott by phone 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 Ms Gillard’s Labour deposed elected Prime Minister Kevin Rudd in June and then bungled a range of policy initiatives.

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