Gillard Wins Independents' Support to Form Australia Government

By Gemma Daley and Marion Rae - Sep 7, 2010 1:39 PM GMT+0800
Australian Prime Minister Julia Gillard clinched a deal with two independent lawmakers, paving the way for her to form a minority government after the closest election in 70 years.

The legislators, Rob Oakeshott and Tony Windsor, said they would back Gillard’s Labor Party over Tony Abbott’s opposition. Both lawmakers said the need to develop Australia’s broadband Internet coverage was a key consideration.

“This isn’t about philosophy, it is about using the political system to advantage the people we represent,” Windsor told reporters in Canberra today.

Gillard’s need to work with independents may raise the prospect of a shortened term. Abbott failed to persuade the two lawmakers to join him after they questioned the true cost of his campaign pledges.

“They won’t be able to govern with independents who may or may not support them on any given day,” Andrew Hughes, an analyst at the Australian National University, said before the announcement. “We’ll have another election within 12 months to try to get greater certainty.”

The Australian dollar extended losses as it became clear Gillard would win the independents’ backing, trading at 91.29 U.S. cents as of 3:11 p.m. in Sydney from 91.76 cents yesterday. The Reserve Bank of Australia bank kept the benchmark interest rate unchanged today, saying the global economic outlook remains uncertain.

Gillard, who ousted predecessor Kevin Rudd in June, has promised to tax mining profits to pay for infrastructure, improved retirement benefits and a corporate tax reduction. Charging companies for pollution and building a A$43 billion ($39 billion) Internet network were also cornerstones of her campaign.

Gillard became the nation’s first female prime minister after ousting predecessor Kevin Rudd in June, taking charge of the nation’s A$1.2 trillion economy.

To contact the reporters on this story: Gemma Daley at gdaley@bloomberg.net; Marion Rae in Canberra at mrae3@bloomberg.net