Pressure builds for new Australia government by end of the week

SYDNEY Sun Aug 29, 2010 3:37am BST

Australian Prime Minister Julia Gillard waves to supporters at the Labor Party election headquarters in Melbourne August 21, 2010. REUTERS/Mick Tsikas

Australian Prime Minister Julia Gillard waves to supporters at the Labor Party election headquarters in Melbourne August 21, 2010.

Credit: Reuters/Mick Tsikas

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SYDNEY (Reuters) - An independent Australian lawmaker voiced hopes on Sunday for a new government within a week, as pressure mounted on cross-bench MPs to back one of the two major political parties to form a minority government.

Neither the ruling Labour party nor the conservative opposition won a majority at August 21 elections, which delivered the nation's first hung parliament in 70 years and put the fate of government in the hands of four independents and one Green MP.

This disparate group, whose pet issues range from curbs on banana imports and better rural health services to gay rights and tougher gambling laws, could determine major issues such as Labour's proposed mining tax and a $38 billion (24 billion pounds) telecoms project.

"I would hope that by the end of the week we should be able to make a decision," independent MP Tony Windsor said.

But Windsor urged Australians to "calm down," acknowledging the media pressure on cross-bench MPs to make quick decisions. The process of forming a government, he said, should not be rushed.

"It could take a little longer than that. For my part in it, I don't intend to rush," Windsor told a TV interview.

With the one Green MP already siding with Labour, Australian newspapers are piling pressure on the four independents to end the uncertainty and choose either Prime Minister Julia Gillard's Labour or opposition leader Tony Abbott's conservative coalition.

The Australian newspaper, owned by media baron Rupert Murdoch's News Corp (NWSA.O), published an opinion poll at the weekend showing that most voters in three of the independents' electorates preferred the conservatives to form government.

Editorials are also calling for an end to the political limbo, highlighting the risk that a sudden renewal of the global financial crisis could catch the nation off guard.

The independent and Green lawmakers have scheduled an intense round of talks this week with Gillard and Abbott, with financial markets hoping that the conservatives, which oppose Labour's mining tax and its $38 billion (24 billion pounds) national broadband project, will win over enough independents to form a government.

The count from last week's election is still incomplete, but it appears likely the conservatives will end up with 73 seats in the lower house, one more than Labour. Seventy-six seats are needed in the 150-member chamber to command a majority.

FRESH ELECTIONS?

With so much uncertainty, online bookmakers Sportingbet said the odds were shortening for another election within months.

Windsor again raised the prospect of fresh elections if one or more of the independents decided to back neither of the major parties. Windsor rated that a 10 percent chance at the moment.

And he said he might not support either party in the end.

"I have not ruled that out," he said.

Financial markets have so far been patient, but investors are concerned that Gillard could make major concessions to the Green MP, Adam Bandt, and another independent, former Greens party member Andrew Wilkie, in order to secure a working majority.

Bandt backs the proposed mining tax, which affects miners like Rio Tinto (RIO.AX) (RIO.L) and BHP Billiton (BHP.AX)(BLT.L), while Wilkie wants a crackdown on gambling, which would affect stocks like Tabcorp Holdings (TAH.AX), Tatts (TTS.AX), Crown (CWN.AX) and Aristocrat Leisure (ALL.AX).

But Gillard's deputy, Treasurer Wayne Swan, denied on Sunday that Bandt or any Green members of the upper house Senate were being offered a ministry in a new Labour government.

"That is not on the table at all," Swan told the TV show "Meet the Press."

(Additional reporting by James Grubel in CANBERRA; Editing by Ron Popeski)

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