Swing-vote Australia MP hints at possible Labor deal

CANBERRA Fri Sep 3, 2010 8:40am EDT

A trio of independent MPs, who will decide the shape of Australia's minority government, meet in the Parliament House in Canberra August 24, 2010. From left, they are Bob Katter, Tony Windsor and Robert Oakeshott. REUTERS/Andrew Taylor

A trio of independent MPs, who will decide the shape of Australia's minority government, meet in the Parliament House in Canberra August 24, 2010. From left, they are Bob Katter, Tony Windsor and Robert Oakeshott.

Credit: Reuters/Andrew Taylor

CANBERRA (Reuters) - One of three independent MPs needed by Australia's Prime Minister Julia Gillard to form a minority government hinted on Friday he could negotiate on Labor's mining profits tax he has previously opposed.

Maverick outback MP Bob Katter gave Gillard and conservative Opposition Leader Tony Abbott a "wish list" of 20 priorities that could cement his support, ruling out a planned emissions trade system and a 30 percent tax on coal and iron ore miners.

But Katter, speaking later to reporters, hinted that the mining tax, brokered by Gillard with Rio Tinto, BHP Billiton and Xstrata, was not a deal breaker in talks on backing a minority government.

"I've put down here no mining tax, because you blokes want a clear-cut statement, but really the arguments that I have put up do not really apply to coal and to iron ore," Katter said. "When I put down no mining tax here, there's a lot of wriggle room."

Stetson-wearing Ketson is a wild card in negotiations, but had been considered the most likely of the three undecided independents to side with the conservatives, due to his opposition to the mining tax.

Gillard's Labor has edged closer to power after winning the backing of another "kingmaker" MP, Andrew Wilkie, following last month's dead-heat elections. His decision gives Gillard 74 seats in the 150-seat lower house, still two short of a majority.

Gillard has promised to introduce the mining tax and a $38 billion broadband project if it wins a second term, as well as a price on carbon to curb one of the world's highest per-capita levels of emissions.

Betting odds now strongly favor Labor to form government after the deal with Wilkie and a sole Greens lower house MP.

Katter's wish list, also given to two other uncommitted independents, called for curbs on the market dominance of Australia's two big supermarket chains, Woolworths and Coles, including a maximum 22.5 percent market share or a maximum 100 percent markup from the farm gate to retail price .

As well, he sought more government oversight of interest rate setting by Australia's independent central bank and a promise to address the "unfair" and artificially high value of the Australian dollar.

The conservatives now have 73 seats, but could still win the race to form a government if the three rural-based independents including Katter line up behind Abbott. The independents said they would decide early next week.

(Editing by Nick Macfie)