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Australia Heads Toward Hung Parliament

22 August 2010 00:12 (UTC +04:00)

Baku-APA. Australia is headed for its first hung parliament in 70 years after a general election Saturday failed to deliver a majority to either the ruling center-left Labor government of Prime Minister Julia Gillard or her Liberal-National coalition rival Tony Abbott, APA reports quoting The Wall Street Journal.
Ms. Gillard said the election was "too close to call," with neither side winning a clear mandate to govern. She added that nonparty independent lawmakers would play a key role in deciding who forms the new administration.
The result could rattle markets Monday as investors weigh the demands of independent lawmakers who will hold the keys to power.
With 76% of votes counted, there is 2.6% swing against Labor, which has 50.5% of the so-called two-party preferred vote against the center-right coalition’s 49.4%, according to the Australian Electoral Commission. The tight result means neither side has the 76-seat majority needed to form a government in the 150-seat lower house of representatives.
Because Australia lacks a major third force in politics, the balance of power will lie with three nonparty independents drawn from rural Australia with backgrounds in conservative politics, a lawmaker from the small Greens party who won that party’s first ever lower house seat Saturday, and another independent lawmaker with links to the environmentalist movement.
That could lead to horse trading over key areas of policy difference between the two major parties like climate change, plans by Labor to levy a new tax on mining company profits and a national high-speed Internet network.
Stephen Smith, foreign affairs minister in the Gillard government, said Saturda
Antony Green, an election analyst with state broadcaster the Australian Broadcasting Corp., expects the Liberal-National coalition to win 73 seats to Labor’s 72 in what has been one of the most closely fought elections in recent history.
Looming over the close race was a tumultuous political period for this normally stable democracy that culminated in the recent dumping of Kevin Rudd as prime minister in a June Labor party putsch.
Ms. Gillard called an election July 17 to capitalize on a lift in sentiment toward her party soon after she took over, but that lead swiftly evaporated amid internal divisions and damaging leaks with the potential to fell the party.
The election came down to a few traditionally tight races--including in Queensland, Mr. Rudd’s home state, where some voters were still smarting over his ouster, and New South Wales, amid disaffection with the Labor-run state government.
Labor suffered a 9% swing against it in Queensland and a 6% swing in New South Wales.
One of the key independent lawmakers, Bob Katter, said Saturday he would meet with other independents in coming days to thrash out a position for negotiation with the major parties.
"The gong will go to whoever will restore regional Australia," Katter, from a remote area in Queensland state, said.
Tony Windsor, a second independent from New South Wales state, said stability of government must be central to any decision on forming the new administration. A third, Robert Oakeshott, said he already has held informal discussions with the Liberal and Labor parties.
Newly elected Greens lawmaker Adam Bandt, who won a historic victory in the Melbourne seat vacated by outgoing Labor finance minister Lindsay Tanner, could be expected to support the Labor Party, given sharp differences with the Liberals over environmental policies.
"Voting Green was the most powerful vote in Australia," Greens leader Bob Brown said Saturday. The Greens also will hold the balance of power in the upper house Senate, which will be another key factor in negotiations.
The fifth player is Andrew Wilkie, a Tasmania state-based independent.
An outright coalition victory was always seen as unlikely. It needed to win as many as 17 lower-house seats to unseat Labor, a tough task, especially given no first-term government has been defeated in Australia since before World War II.
The election was, in part, a referendum over Mr. Rudd, and the party’s handling of a controversial tax on mining-company profits that played a key role in his ouster.
The tax plan sparked a bitter war with Australia’s biggest mining firms, who argued it would hobble the country’s economy. Labor’s simmering dissatisfaction with Mr. Rudd turned to full revolt.
Days after succeeding Mr. Rudd as prime minister, Ms. Gillard lowered the proposed tax to 30% from 40% in a deal with the country’s biggest miners, prompting new cries of favoritism from smaller miners.
Mr. Abbott of the Liberal-National coalition has vowed to scrap the tax if he comes to power. Two of the three non-party independents have expressed support for the mining tax.
All three also support Labor’s plan to spend as much as US$38 billion (A$43 billion) on a fiber Internet network to make Australia’s data and mobile connections among the world’s fastest, transforming the economy from a relative technology backwater to high-tech modern economy.
The plan has been targeted by the Liberal-National coalition, which has said it favored a slower, less costly alternative that would give the private sector a greater role and use a mix of fiber, copper and wireless technologies.
On climate change, the three are divided.