Gillard to form minority government

Gillard's success ends intensive negotiations over regional investment.

Labor Prime Minister Julia Gillard will form the next government of Australia after winning the support of two independent MPs.

The end of negotiations crowns the (not uncontroversial) rise of Gillard within the Labor Party.

GIllard secured the backing of MPs Tony Windsor and Rob Oakeshott with the settlement of AUS $9.9 billion to invest in Australia's regional communities, and AUS $43 billion national broadband roll-out. The Prime Minister said previous administrations had short-changed regional Australia for too long. She plans to find the money for the deal out of spending cuts elsewhere.

The Prime Minister's successful negotiation built on her pact with the Green Party last week. The pact commits Gillard to forming a cross-party committee on climate change and forming a policy on carbon pricing. Gillard is expected to move quickly to introduce a 30% tax on the profits of Australia's profitable mining companies.

The Murdoch press was predictably vexed with the outcome, currently billing Gillard's success as a 'snatch' of power.