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Tough Road Ahead for Australia's New Minority Government

Australia's first minority government for 70 years has started work following the closest election result in the country's history. Now Labor Prime Minister Julia Gillard must get her coalition to address a range of issues ranging from immigration to the needs of rural communities.

One seat

Julia Gillard's Labor Party managed to cling to power by a single seat in parliament after receiving the support of a small group of non-aligned lawmakers and a member of the Greens Party.

Australia has not had a minority federal government in since World War II but Prime Minister Gillard says she is ready for the challenge of leading a coalition.

"Where we are now, and I think this is the important thing that matters for the Australian people, is looking to the future with a different parliament with a different way of working with things that the Australian people care about absolutely passionately, to be focused on and delivered," Gillard said.

The government was formed 17 days after the election, in which voters gave neither of the biggest two parties a clear majority. In the end the final decision came down to a handful of independent lawmakers.

Future challenges

The government has promised a multi-billion dollar package to improve infrastructure in the country's more rural areas to secure the support of two independent lawmakers. Then there is an alliance with the Greens Party, which is likely to bring a more proactive approach on climate change, an issue the major parties almost ignored during the election campaign.

Dean Jaensch, a professor of politics at Flinders University in South Australia, thinks satisfying the range of different interests will be tough.

"My feeling is one of the difficult jobs the Gillard government is going to have in the House of Representatives is the motley lot that's made up its majority. I mean you have Labor, which is now dependent on one Green, one independent from a Labor-voting seat in Tasmania and two former National Party members," Jaensch said. "Now that is a motley lot so just rustling them all up and pointing them in the right direction might be difficult."

Already Labor's relationship with some the independents appears to be strained over a controversial tax on mining profits. The government wants to impose the tax to boost pension funds and fund infrastructure projects. The independents want a special tax summit to review the levy, known as the Mineral Resource Rent Tax, or MRRT, a idea the government is resisting.

Treasurer Wayne Swan says the tax should stay as it is.

"The fact is that the MRRT is critical to funding our investments in superannuation (pensions), in regional infrastructure and lower corporate tax. So, the independents will want to be informed about the final design of the tax and we will be seeking their support for the final design of the tax and for the revenue stream that is provided for those fundamental investments in our economy," Swan said.

The Greens and Andrew Wilkie, an independent from Tasmania who backs the Gillard government, are likely to seek a more compassionate approach to asylum seekers who try to enter the country illegally. The government hopes to open a center in East Timor to process their applications, but that plan is likely to be watered down or abandoned.

International competition

The new administration also has to establish a unified stance on foreign affairs.

Professor Hugh White from the Australian National University thinks the diplomatic landscape in the Asia-Pacific region will eventually change and Australia will have to contend with greater competition between the United States and China.

"If the U.S.-China relationship becomes more strategically competitive, as I fear it will, we'll have to decide whether we side with the United States in that kind of competition, whether we support America in trying to maintain its primacy against China, or whether we don't go that route," White pondered, "whether we pull back and become more impartial, more neutral perhaps; perhaps let the alliance with the United States go."

He says that decision would be difficult, given Australia's long ties with the United States, and its growing business relationship with China, its leading trade partner.

The new parliament starts work September 28.