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Australian Prime Minister Julia Gillard today claimed her Labor
party was best placed to run a stable minority government after the
election dead heat, warning of political gridlock if a consensus
cannot be found.
Gillard also said she was not in favour of calling a fresh election
to resolve the impasse thrown up after neither of the country's
main parties won a majority at the August 21 polls.
Labor and the conservative opposition are now in a race to win the
support of four independent lawmakers to cobble together the
parliamentary numbers needed to form a government.
In a speech to Canberra's National Press Club, Gillard said the
next government needed to find ways of building consensus and
support in parliament, and she was best placed to deliver.
"If the new government doesn't find new ways to establish consensus
and parliamentary support, then we will have gridlock, and we will
quickly look more like Washington than Westminster," she
said.
"What is needed more than anything now is continuity - continuity,
certainty and delivery. I believe I can provide that stability,
certainty and continuity."
Conservative opposition leader Tony Abbott earlier claimed the
upperhand as counting from the election briefly gave his party more
votes and parliamentary seats than Labor - but that situation soon
turned around, cheering Gillard's supporters.
Election projections point to the conservatives ending up with 73
seats and Labor 72, with the four independents and one Green MP who
has already said he favours Labor in the race to gather the 76
seats needed to govern the 150-seat lower house.
One independent, Andrew Wilkie, has said he will decide this week
which side to back.
He has already asked both leaders to launch a crackdown on
gambling, which would affect stocks like Tabcorp Holdings, Tatts,
Crown and Aristocrat Leisure.
Financial markets hope Abbott's coalition prevails, given his
promises to scrap Gillard's proposed mining profits tax and
carbon-trading plans, and a $54 billion broadband project that
could hurt dominant telecoms provider Telstra.
"At the moment the market is hanging on the belief that the
coalition will probably get up, and that's helped mining stocks,"
said Shane Oliver, head of investment strategy at insurer and asset
manager AMP, which manages $120 billion in Australia.
Kingmakers want stability
Australian shares fell today, in tune with a sell-off on Wall
Street, but local mining stocks have fared better than other
sectors since the election on hopes that Gillard would be ousted
and the mining tax scrapped.
Miners that stand to benefit from the tax's demise include Rio
Tinto, BHP Billiton, Xstrata and Fortescue Metals Group.
Scrapping the broadband network is also seen as benefitting
shareholders in Telstra, as it would kill a $14 billion deal by the
company to provide its infrastructure to the scheme.
Political experts have dismissed the market's reaction as wishful
thinking and point out that most of the independents favour some
Labor policies over the conservative agenda.
Tony Windsor, one of the four independents holding the key to
power, said he would back the candidate he felt would maintain a
stable government, and not necessarily the one with most
votes.
The four "kingmaker" MPs have threatened to force fresh elections
should they lose faith in both sides' ability to deliver
parliamentary reform and stability.
Underlining the post-election volatility, a poll today showed 13%
of voters would have decided differently had they known the country
was headed towards gridlock, possibly pointing to a vastly
different parliament next time around.
The nationwide Ogilvy Illumination poll in the Sydney Morning
Herald newspaper showed voters aged between 18 and 24, and strongly
supportive of Greens lawmakers backing carbon trading and
broadband, were most inclined to change their vote.
Moody's Investors Service said it expected the stable trend in
Australian corporate ratings to continue as the new financial year
progressed, though conditions were likely to remain choppy as the
effects of the sharpest slowdown in decades continued.
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