Australian prime minister says election is too close to call

Aug. 20 (Bloomberg) -- David Forrester, a currency economist at Barclays Capital, talks about the outlook for the Australian dollar ahead of this weekend's federal election. He speaks from Singapore with Linzie Janis on Bloomberg Television's "Global Connection."
By Rod McGuirk
Sunday, August 22, 2010

CANBERRA, AUSTRALIA -- It could take more than a week to learn who will govern Australia after a cliffhanger election -- the country's closest in nearly 50 years -- and the winner may have to woo the support of a handful of independent lawmakers to assume power.

Prime Minister Julia Gillard took office in an internal Labor Party coup just two months ago. She said Saturday that she will remain the nation's caretaker leader during the "anxious days ahead" as vote-counting continues.

The Australian Electoral Commission Web site said early Sunday that center-left Labor and the conservative Liberal Party-led coalition each had 71 seats, meaning neither could achieve the 76-seat majority.

"Obviously, this is too close to call," Gillard told the party faithful who gathered Saturday in her home town, Melbourne, in the hope of hearing a victory speech. "We will continue to fight to form a government in this country."

Liberal leader Tony Abbott said he would immediately begin negotiations with independents to form a government.

"We stand ready to govern, and we stand ready to offer the Australian people stable, predictable and competent government," Abbott told supporters at Liberal campaign headquarters in Sydney.

Analysts said Australia's major foreign-policy positions, including its deployment of 1,550 troops to Afghanistan, would be unaffected by whichever party wins, because both hold similar views. Domestic issues vary across the large and diverse country and include hot topics such as health care and climate change.

An Australian government has not relied on the support of independent lawmakers to rule since 1942, but it could happen again. The ranks of the independents in the 150-seat lower house rose from two in the last election to three, possibly four.

Two independents, Rob Oakeshott and Tony Windsor, said they would side with whichever party could provide the most stable government. A third independent, Bob Katter, said he would support the side that pledges the best deal for his constituents. All three are former members of conservative parties.

The election results were expected to be the closest since 1961, when a Liberal government retained power by a single seat.

Norman Abjorensen, an Australian National University political scientist, said the most likely outcome would be an unstable minority government led by Abbott and supported by independents.

He and other analysts predicted the final count would give Abbott's coalition 73 seats -- one more than Labor.

Meanwhile, the left-wing Greens party attracted a record number of voters, delivering it a rare seat in the lower house, where parties form the government.

The Greens were also likely to increase their representation in the 76-seat upper house from five to nine senators, assuring them a say on contentious legislation.

Gillard, a charismatic and sharp-witted 48-year-old former lawyer, came to power June 24 in an internal Labor Party coup during the first term of her predecessor, Kevin Rudd, and almost immediately called elections to confirm her mandate.

Abbott, a 52-year-old former Catholic seminarian, barely gained the endorsement eight months ago of his Liberal Party, which has led Australia for most of the past 60 years.

-- Associated Press

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