Gillard's second shot at power

ANDREW MEARES/Sydney Morning Herald

IN CHARGE: Australian Prime Minister Julia Gillard.

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Julia Gillard has promised to heed the lesson handed to Labor at the election and govern with a new style of openness after her nerve-racking wait ended and she scraped back into power by the slimmest of margins.

Ms Gillard will lead a minority government after the rural independents Rob Oakeshott and Tony Windsor accepted a rural package worth $10 billion - which included a new ministry, billions in infrastructure and fast-tracked, subsidised broadband - and backed Labor, giving it the barest majority of 76 seats.

Tony Abbott, a hero in his party for almost pulling off an unlikely win, won the support of the third rural independent, Bob Katter, and finished with 73 seats.

The West Australian National, Tony Crook, who on Monday pledged to help Mr Abbott form a minority government, withdrew that pledge after the result was known yesterday and will sit on the crossbench, unaligned.

In a day of high drama, the independents announced their decisions more than two weeks after Australia voted for a hung Parliament and 7½ weeks after Ms Gillard called the election. Ms Gillard and Mr Abbott had to watch TV like everybody else to learn their fate.

With the demise of just one MP and a subsequent byelection enough to cause another election or a change of government, Labor sources said last night that discipline within the ALP would have to be rock solid if Ms Gillard were to govern for the next three years as she has promised.

The use of expenses and allowances and other behaviour would have to be exemplary across the board. This message is expected to be delivered when the caucus meets tomorrow.

Ms Gillard will pick her frontbench next week but Labor's factions will meet today to discuss other spoils of office.

Ms Gillard said the message from the voters was that her government would be more accountable ''than any government in modern memory''.

''We will be held to higher standards of transparency and reform and it is in that spirit that I approach the task of forming a government,'' she said.

Mr Abbott pledged he would not try to bring the government undone with frivolous no-confidence motions but warned he would not give it a moment's peace.

''We will hold them ferociously to account because that is what the Australian people will expect of us'' he said.

''If the government is seriously incompetent, it should be gone as quickly as possible.'''

The Nationals attacked the rural independents for joining the ''rainbow coalition''.

Ms Gillard governs with the support of Mr Oakeshott, Mr Windsor, the Greens MP, Adam Bandt, and the left-leaning Tasmanian independent, Andrew Wilkie. While they hold disparate policy views on some issues, they have in common support for a price on carbon and a profits-based tax on the mining sector.

Their support for Labor extends only to siding with it against unwarranted no-confidence motions and guaranteeing supply.

Mr Oakeshott is considering an offer to be a new dedicated minister for regional Australia, part of the deal he and Mr Windsor crunched.

The pair secured from the government a commitment of a tax summit by June next year and a $10 billion package of rural policy priorities.

Of this, only $1.1 billion was new money while the rest included rededicating funds in existing programs, such as the $6 billion regional infrastructure fund to be financed by the mining tax, and bringing forward other monies.

The national broadband network will be rolled out in regional Australia as a priority and rural broadband users will be subsidised so they pay no more than those in the cities. Ms Gillard would not rule out city users paying more for broadband to cover the subsidy.

The $1.8 billion health and hospitals infrastructure money which has been brought forward, and $500 million which has been brought forward from the Education Investment Fund, must be exclusively spent in rural areas.

Mr Windsor said his vote hinged on Labor's broadband policy which, although expensive, was needed. ''You do it once, you do it right, and you do it with fibre,'' he said.

He urged conservative voters in his seat of New England angry at his decision to consider that both main parties had long ago merged their philosophies and sidelined the rural vote. So much so that elections these days were fought in the western suburbs of the main cities.

With stability the key, he believed Labor was more likely to serve three years because he felt it would lose if it went to an early election.

Mr Oakeshott was also swayed by a more Labor-friendly Senate, which would be controlled by the Greens.

- © Fairfax NZ News