Australia faces hung house

Australian Prime Minister Julia Gillard, right, leader of the Australian Labor Party, smiles with her partner Tim Mathieson at her hometown of Altona in Melbourne, Australia, Sunday, Aug. 22, 2010. It could take more than a week to learn who will govern Australia after a cliffhanger election, the closest in nearly 50 years, and the winner may have to woo the support of a handful of independent lawmakers in order to assume power. AP

With 78 per cent of votes counted, a hung parliament was most likely, with two possible scenarios for a minority government: a conservative administration backed by rural independents or a Labor government backed by Green or green-minded MPs.

The latter scenario is frightening for many investors, with Prime Minister Julia Gillard indicating on Sunday after early talks with independent and Green MPs that she was open to discussing the policies of this disparate group of lawmakers.

“It is my intention to negotiate in good faith an effective agreement to form government,” said Gillard. Her Labour Party was better placed to deliver a stable government.
Conservative leader Tony Abbott also met some crossbench MPs on Sunday.
“I have spoken briefly to each of the three independents. I don’t want to pre-empt the discussions that I expect will be held over the next few days,” Abbott said.

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