Australian opposition power bid set back

Tony Abbott, Australia’s opposition leader, conceded on Wednesday that his chances of becoming prime minister had suffered a setback when he said Julia Gillard had been thrown a “lifeline” after she reached a deal with the Greens.

The support from the Greens gave Ms Gillard, the Labor prime minister, one extra seat in parliament, matching the 73 seats held by Mr Abbott’s conservative coalition.

Both sides need the support of at least three of four independent MPs to reach the 76 seats needed to form a government. If neither side gets enough support from the independents, Ms Gillard may need to call another election.

Australia has been in deadlock since a parliamentary poll on August 21 delivered the first hung parliament in 70 years. Mr Abbott and Ms Gillard have since been racing to win the backing of the independents.

The political turmoil comes as Australia’s economy remains one of the strongest in the advanced world.

Figures out on Wednesday showed gross domestic product had advanced a higher-than-expected 1.2 per cent in the three months to June 30, compared with a revised figure of 0.7 per cent for the opening quarter of the year. On a year-on-year basis, the economy grew by 3.3 per cent in the latest quarter, beating the central bank’s 3 per cent forecast.

Labor sought to burnish its economic record by saying that the GDP figures had followed a steady flow of positive data this week, including better trade and retail sales figures than expected. The latest data found that household consumption was driving growth again as fiscal stimulus measures that had helped stave off recession were wound down.

Mr Abbott, however, attacked Labor as being run by factional chiefs who had a “power-at-all-cost” approach to leadership.

“I’m disappointed that no serious negotiation was entered into between the coalition and the Greens and that the Greens chose to consummate what was plainly a pre-arranged deal,” he said. “The point I made to [Green] Senator [Bob] Brown last night is that this is the most corrupted Labor party in living memory. This is a Labor party that is completely run by the hollow men.”

Australian politics has been in upheaval since June when the Labor party deposed Kevin Rudd as prime minister before the end of his first term. Mr Rudd entered 2010 as the country’s most popular leader but he was toppled after a spate of policy blunders triggered a dive in his opinion poll standing.

In a sign of the concessions the main parties will need to make to win over undecided MPs, Ms Gillard agreed to a number of demands from the Greens, including supplementing her unpopular “citizens assembly” proposal to decide a national strategy on climate change with a cabinet-style parliamentary committee.