New Australian Greens MP Adam Bandt has formally sided with Labor in the hopes of forming a minority government.
In a widely expected move, Mr Bandt signed an agreement with Prime Minister Julia Gillard at Parliament House on Wednesday morning.
As part of the deal, Ms Gillard agreed to a host of demands from the Greens, including having a referendum about recognising indigenous people in the constitution and a full parliamentary debate on Australia's military involvement in Afghanistan.
The deal leaves Labor with 73 seats, the same number as the oppostion Coalition. Seventy-six seats are needed to form a government.
Treasury briefing for independents
The four Independent MPs are still being courted by both sides, the ABC reports. Three of them are getting a briefing from the head of Treasury on Wednesday about the impact of election promises made by Labor and the Coalition.
The briefing will help the three decide which party they will support so that a minority government can be formed.
Bob Katter, Tony Windsor and Rob Oakeshott are negotiating with both sides of politics as they make up their minds.
The talks follow back-to-back meetings with senior bureaucrats on Tuesday that stretched well into the night.
Labor's offer 'not quite there' for Wilkie
As the trio continues gathering information, the lone ranger of the independent MP pack - Hobart-based Andrew Wilkie - is edging closer to making his final decision.
Mr Wilkie says he received a detailed offer from Ms Gillard but will not make his mind up until he sees an offer from the Coalition.
Labor's offer "goes some way" towards addressing his key issues of pokie reform and refurbishing Hobart Hospital, he says, but it is not quite there.
"I haven't been offered anything by either of the leaders yet that will persuade me to support either of them," Mr Wilkie says. "Unless I am persuaded, I'll support neither."