Independents set to deliver new minority Australian government

Prime minister Julia Gillard edged closer to retaining power in Australia yesterday when an independent politician said he would support her centre-left Labour Party to form Australia's first minority government in almost seven decades.

A bloc of three independent "kingmakers" will now decide whether Labour will govern for a second three-year term or whether a conservative Liberal Party-led coalition will form the next administration after 21 August elections failed to give any party a majority.

The conservative coalition now needs the backing of all three remaining uncommitted independents to reach a 76-seat majority in the 150-seat House of Representatives, while Labour needs only two.

Independent Andrew Wilkie announced his decision to back Labour after meeting Ms Gillard and Liberal leader Tony Abbott.

"I have judged it is in fact the ALP that best meets my criteria that the next government must be stable, must be competent and must be ethical," Mr Wilkie said, referring to the Labour Party.

Mr Wilkie entered parliament after quitting his job as a defense intelligence analyst in 2003 to protest at the then-conservative government's "grossly unethical" explanation for sending 2,000 Australian troops to Iraq.

He said he expected his fellow independents were now more likely to support Labour after new figures showed that the coalition had overstated savings their election promises would confer by up to AU$10.6 billion (6.2bn).

Ms Gillard accused Mr Abbott of campaigning "deceitfully" by underestimating the costs of coalition policies and failing to submit most of them to the treasury and finance department for review until after election day.

She said the independent trio had "done the nation a great service" by demanding to see the official costs of both parties' election promises before deciding whom they would support. The three lawmakers made the figures public late Wednesday after briefings by senior government officials.

Leading Liberal politicians have stuck by the accuracy of their own figures and said the discrepancies with official calculations by government ministries were "a difference of opinion" on methodology and underlying assumptions such as future interest rates.

Mr Abbott said the discrepancies did not compromise his negotiations with the three kingmaker legislators. "The bottom line is that there are two competing economic records here," Mr Abbott said.

He said that when Labour was elected in 2007, it had inherited AU$60bn (35bn) in assets, which it turned into AU$90bn (53bn) of debt through economic stimulus spending. The treasury also found that Labour had understated the improvement to the budget position under its policies by AU$62 million (36m).

The three independents last night said they were unmoved by Mr Wilkie's decision and were unlikely to reach their own decisions before early next week.

Bob Katter said they "would have made a bad error" if they had judged the coalition's policies before seeing the Treasury analysis, while Tony Windsor said he didn't trust either Ms Gillard or Mr Abbott on the economy. Rob Oakeshott said he was "surprised" by the 6.2bn discrepancy, which he described as "big miss" in Abbott's economic projections that would be "a factor" in his decision.

Australia will return to the polls if neither leader can secure the support of 76 lawmakers. The country has not had a minority government since 1943.