Australian Prime Minister Julia Gillard clung onto power on Tuesday, securing support from independent lawmakers to form a minority government after her Labor Party lost its majority at elections last month.
Labor now has a one-seat majority in the 150-seat parliament after winning the support of three of the independents and one Greens MP.
KEY POINTS
– August 21 election delivered a hung parliament, the first in 70 years, with neither the ruling Labor Party nor the opposition conservative coalition winning an outright majority.
– Four independent lawmakers and one Green MP emerged with the balance of power after an election campaign that focused on economic management, immigration and Labor proposals for a mining tax and for a $38 billion fibre-optic national broadband network.
– Prime Minister Julia Gillard called the election after she deposed her predecessor, Kevin Rudd, in a party-room coup in June to become the nation's first female leader.
– Labor came to power in 2007 after 12 years of conservative rule. No Australian government had been voted out of office after just one term in office since 1931, during the Great Depression.
COMMENTARY
Brian Redican, Senior Economist, Macquarie Bank: "With the independents giving their support to Labor, (the mining tax) has every chance that it will be passed. (The carbon tax) will require the support of the Greens. And I think what we are really talking is 12 months for that shift in policy."
Michael Workman, Economist. Commonwealth Bank of Australia: "It was a fairly calm time for the market and I imagine this is in prospect. The senate changes next year where the Greens will hold the balance of power may stymie some tax reforms, but otherwise I think the market is fairly relaxed on a minority government. Both parties promise to be fiscally conservative and the budget will return to surplus in 2013 regardless of who is in power. The growth outlook is strong because China remains strong and that is what matters."
Lane Crockett, General Manager, Australia, Pacific Hydro: "The massive swing to the Greens represents a general view within Australia that people are sick of not doing something about climate change. (Independent MP) Tony Windsor highlighted the benefits of renewable energy for the bush and regional Australia. (Independent MP) Rob Oakeshott has also talked very strongly about climate change policy. So there's a real opportunity here that we can expect a carbon price to be introduced in some form or another in Australia in this next term."
Ben Jarman, Economist JPMorgan: "The policy implications of this are definitely uncertain. The resources tax presumably goes ahead but with the increased presence of the greens in the senate there could be more negotiations on that front too."
John Warhurst, Professor of Politics, Australian National University: "I think (the government) will last a good while –it may not last three years, but it will last two, and may even last three. I think it's reasonably stable. My guess would be that it will be fairly much a status quo on the mining tax."
Angus Gluskie, Portfolio Manager, White Funds Management: "Pre-election, everyone had a good insight into the MRRT (minerals resource rent tax) and we had several months of trading while that was viewed as being the likely regime. Telstra now gets the certainty of the agreed compensatory payment. That certainty is viewed by Telstra as being a plus, and most fund managers will end up subscribing to that view."
