Gillard to remain Australian PM

LABOR Party leader Julia Gillard will form the first minority federal government in Australia since 1940 after winning the support of key rural independents.

Independents Tony Windsor and Rob Oakeshott both said they'd back Labor.

Labor prepared to govern: Gillard

"I intend with my vote, for what it's worth, to support the Labor party," Mr Windsor told reporters in Canberra.

Mr Oakeshott followed suit.

"Today I'll do what I have always done and give confidence and supply to government and in effect that means confidence and supply in Julia Gillard," he said.

That means Labor has a majority 76 votes in the 150-seat lower house.

Mr Windsor said he would support supply but would not support trivial no-confidence motions against the Labor government.

"And I will reserve the right to represent my constituency on any vote in the parliament and also reserve the right to move a no-confidence motion in the government as I see fit," he said.

The third kingmaker rural independent, Bob Katter, announced earlier in the day that he was supporting the coalition.

Mr Windsor said possibly "the most critical" issue he'd considered was broadband.

Labor has committed to rolling out a $43 billion national broadband network.

"There's an enormous opportunity for regional Australians to engage with the infrastructure of this century and ... I thought (that) was too good an opportunity to miss," he said.

"You do it once, you do it right and you do it with fibre."

Mr Oakeshott said the key issues for him were broadband, climate change and regional education.

Mr Windsor said another factor in his decision was energy policy, as he believed it was time for Australia to revisit a carbon tax or other climate policy.

"It's obvious to me that regional Australia would be a major beneficiary of a lot of the renewable energy sources," he said.

"I see enormous opportunities where others fear the whole climate change debate."

Mr Windsor also reflected on the political representation of rural voters, who he said were "assumed by one side and taken for granted by the other".

"The fact that there are country independents in this building indicates that country people have had enough of that," he said.

Rather than choosing between two different philosophies, Mr Windsor said both major parties had become the same, and the independents had taken advantage of the election outcome to advance their causes.

"If you want to be taken for granted in the future, go back to the old ways, because that's exactly what will happen to you," he warned rural voters.

"Through their various documents that they've put together, the admission is that they have neglected country Australians.

"They are attempting through this process, because of the way the numbers have been crunched, to try and rectify the situation."

Mr Oakeshott said he thought long and hard about who dealt better with broadband, climate change and education when coming to his final decision.

He said there was a "crisis" in regional education.

"We now have national indicators in education, around poorness, around indigenous and around regional.

"It is a disgrace that regional education has been left behind in this country, when it is the meal ticket for all those three combined."

Mr Oakeshott wasn't happy with the coalition's decision to axe Labor's computers in schools program, and praised many of the reforms Ms Gillard implemented when she handled the education portfolio.

Mr Windsor said the final decision was made early on Tuesday morning.

"We talked through a range of issues and I think it was probably 1.30am (AEST) that we actually reached a decision," he said.

"In the end I think for both of us ... we've both lived our political lives being able to sleep at night.

"In the end it came to me that I thought, I'm comfortable with this, I can live with this."

Mr Windsor said he would not be speaker or a minister in the Gillard government.

"No and no," he said in answer to a reporter's question.

Mr Oakeshott said an offer had been made but he declined to give details.

"It is separate to any consideration in this whatsoever," he said.

"I don't want to be someone who gives up the confidence of discussions."

Mr Oakeshott reserved the right to support a vote of no confidence in the Labor minority government in exceptional circumstances, such as "the obvious ones, maladministration, corruption".

He might also "exert some muscle", if, in consultation with other MPs, it was determined the government was reneging on its deals.

"If people aren't fair dinkum about the documents they've signed, the regional Australia package for example, we will get increasingly agitated about getting done over in a deal and start to exert some muscle as quite rightly we should," he said.

Mr Windsor said he had reached a breakthrough with Labor to have equity with wholesale prices for country broadband as part of a "value add" to the government's existing policy.

Asked why he thought a coalition government would be more likely to go to the polls before three years were up, Mr Windsor said: "Because I think they'd be more likely to win."

Asked how he could then back the least likely poll winner, he said Labor had "more to lose".

"They're more likely to be here for a longer period of time if they can't go to the polls and win in a hurry," he said.

Mr Oakeshott rejected suggestions that because his NSW electorate of Lyne was previously held by The Nationals his constituents would have expected him to back the coalition.

In Port Macquarie, there were no political parties in play.

"There is none at a local government, there's none at a state level and there's none at a federal level," he said.

Mr Oakeshott said he was frustrated by interpretations of his electorate by people with no idea what was happening on the ground.

It was an independent electorate with a mix of party political views.

"But the cultural shift we have all got to make in this parliament is no political party has dominance.

"We have all got to learn to work with each other, even if they are traditional foes."

Mr Oakeshott said he and his fellow independents had just gone through an incredibly unnatural decision to draw some conclusions about lining up with a party they fundamentally don't believe in.

"But in the greater good, in the greater interest we've done it," he said.

"I think we will be able to have a really good conversation with the electorate.

"Yes we are all expecting some blisters over the next couple of days from various political interpretations of events."

Mr Windsor said there'd been some background noise from the coalition - but not Mr Abbott - during the 17 days of negotiation following the August 21 election.

"(It) was a little bit louder than background noise that if there was a hung parliament with the coalition in government that they'd rush off to the polls as soon as they could," he said.

"(But) one of the things we really want to do is try and get some longevity into this parliament, work with the government of the day and potentially keep the parliament going for the period of the three years."

Mr Oakeshott said he had spoken with Cape York indigenous leader Noel Pearson who had put a strong case to him.

But there was more than one view about indigenous Australia and indigenous affairs.

"One of my great frustrations about this parliament in regards to conversations about education and employment in regional indigenous issues is there's almost this automatic drift to the Northern Territory or Cape York."

But the reality was more than 50 per cent of the indigenous population lived between Sydney and Rockhampton, Mr Oakeshott said.

"This is a conversation that needs to begin," he said.

Mr Oakeshott said he would not play party politics with anyone, "even an indigenous elder".

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