Radio New Zealand - Te Reo Irirangi o Aotearoa

Testing times ahead, admits Gillard

Updated at 7:21 pm on 8 September 2010

The Labor government will face its toughest term in modern history after winning just enough votes to form a minority government, admits Prime Minister Julia Gillard.

Two key rural independent MPs, Tony Windsor and Rob Oakeshott, announced on Tuesday that they would back Labor, giving the party 76 votes in the lower house, enough to form a government.

After the tightest election race in decades, Ms Gillard says voters will scrutinise every move the government makes.

She says she hopes the government can run a full three years, despite being only one vote away from losing power.

After more than a fortnight of suspense, Mr Oakeshott and Mr Windsor revealed their intention to give Labor their crucial votes. A third independent, Bob Katter, earlier decided to support the Coalition, but it was not enough to install Tony Abbott as prime minister.

The ABC reports Ms Gillard's government will focus on the regions after promising Mr Oakeshott and Mr Windsor a $A9.9 billion package for rural Australia and pledging to restructure Parliament and the public service to better meet the needs of the regions.

Mr Abbott says he will not attempt to force people back to the polls and has vowed to hold Labor to account. "How quickly we go back to an election depends entirely on the performance of this government," he said. However, he says he does not think the public wants another election at the moment.

Ms Gillard says she is relieved the election and post-poll negotiations are over.

Australian Green Party leader Bob Brown says his party does not have the numbers in the Senate to return the proposed mining tax to its original form.

The original mining tax proposal was changed when Julia Gillard became Prime Minister in a bid to win over the mining industry.

Mr Brown promised to lobby for the tax to be changed back but he says the Greens will not be able to force it.

Treasurer Wayne Swann has dismissed suggestions there are already signs of policy tensions between the government and one of the independents who gave it power.

Under its deal with Mr Windsor, Labor agreed to hold a tax summit by 2011 to discuss all the options put forward by the Henry Tax Review.

But the Treasurer Wayne Swan has ruled that out, saying it won't be happening.

Copyright © 2010, Radio New Zealand