Gillard begins delicate balancing act

Canberra: Australian Prime Minister Julia Gillard began a new term in office yesterday at the helm of a government that hangs precariously on the support of just two independent MPs, but said she was confident the new government would survive the full three-year term.

The Australian Labor Party's minority government is just one vote away from losing its grip on power and will face a continuing challenge to keep its members and independents together on legislative matters.

The Labor Party won a total of 76 seats in the Lower House, which includes support pledged by one Greens MP and three independents. The Coalition secured 74 seats in the Lower House, which included the support of two independents.

The difficulties were highlighted when Australian Greens leader Senator Bob Brown said yesterday he wanted the new government to return to the original 40 per cent resources super profits tax (RSTPT) introduced by former prime minister Kevin Rudd. The unpopular tax brought about Rudd's downfall and was watered down to about 30 per cent in a compromise deal reached with the giant mining companies by his successor Gillard within days of her taking office.

The Gillard government has agreed to a demand by its independents to hold a "tax summit" before June next year to discuss all aspects of Australia's taxation regime, but Treasurer Wayne Swan insisted yesterday that the mineral resources rent tax (the successor to the RSPT) would not be on the agenda.

Mining tax issue

He also said around A$6 billion (Dh20.1 billion) of the A$10 billion regional programmes sweeteners offered to the independents for their support would come from mining tax revenue.

Independent MP Tony Windsor expressed surprise at Swan's remarks, saying he believed the mining tax issue should be reviewed at the summit.

The opposition was quick to pour scorn over the Labor-Greens alliance.

Opposition treasury spokesman Joe Hockey said yesterday: "The pre-nuptial agreement will not last. The couple is already arguing and they're not even out of the wedding chamber yet."

The ALP caucus will meet in Canberra today for the first time since the election to discuss the composition of the ministry.

Gillard said she was well aware of the dangers. "I am going to be held to higher standards of accountability than any prime minister in the modern age," she said.

But she insisted the next election would be in 2013 and that she had begun shaping the team that she hoped would get Labor through the next three years.