Labor to form minority government, pursue climate bill

Australia is to revive stalled plans for a carbon pricing mechanism after two independent MPs today confirmed they would lend their support to Labor, allowing Prime Minister Julia Gillard to form a minority government.

The resolution of 17 days of talks following last month's inconclusive general election came when Rob Oakeshott and Tony Windsor said they would back Julia Gillard, giving her Labor party a majority of just one vote. A third independent, Bob Katter, decided to support the opposition Liberal-led coalition.

In his speech confirming the decision, Oakeshott said Labor's promised action on climate change had been a key factor in his thinking, which had been primarily "through the eyes" of his children.

Similarly, Windsor said energy policy was a factor in his thinking, adding that he believed it was time for Australia to revisit the idea of a carbon tax or carbon trading scheme.

"It's obvious to me that regional Australia would be a major beneficiary of a lot of the renewable energy sources," said Windsor, who represents a rural seat. "I see enormous opportunities where others fear the whole climate change debate. "

Throughout the election Gillard and her Liberal opponent Tony Abbott clashed repeatedly over climate change with the Liberals arguing any carbon pricing mechanism would constitute an energy tax and Labor accusing its opponent of denying the realities of climate change.

Going into the election the Labor government had repeatedly tried to pass climate change legislation that would have allowed a nationwide emissions trading scheme to be introduced from 2012. But its efforts were consistently blocked by both Liberals and the Green Party, which claimed the proposed bill was not ambitious enough.

However, it now looks certain that some form of climate bill will be revived after Gillard last week won support from the Greens in the Senate. In exchange, she agreed to establish a climate change committee made up of lawmakers and scientists that would look at pricing carbon.

The Australian Greens said today that they will now move quickly to set up the committee, as they attempt to establish the adoption of climate legislation as a top priority for the new minority government.

"This is the best political opportunity collectively we've ever had," Christine Milne, deputy leader of the Greens Party, said at a clean energy conference in Sydney. "If Julia stays in that role, this committee will be on track fast and furious and will be what I put all my energy into."

However, with Labor's control of the parliament resting on one vote it remains to be seen how quickly the government can introduce new legislation and to what extent political horse trading waters down any climate bill.