Gillard ready to get down to real business

Julia Gillard. Photo / Getty Images

Australia gets back to the real business of politics today as both major parties meet in Canberra to map out the next three years under leaders who have each increased their stature in the nation's tightest election for decades.

Julia Gillard faces a caucus that survived by the slimmest of margins after diving from the peaks of popularity to near-defeat. But she nonetheless emerged as Prime Minister of a minority Government formed by her formidable negotiating skills that won the support of two conservative independents snatched away from the Coalition.

Opposition Leader Tony Abbott is now a Liberal hero, entrenched in his authority by lifting the Opposition from its near-hopeless expectation of defeat to a steamroller that won more primary votes than Labor and nearly knocked it from power.

Abbott and his key shadow ministers will be confirmed in their jobs today by an Opposition that knows it is only a byelection or change of heart away from another grab at power.

In the Labor caucus, Gillard's overriding message will be blunt and simple: keep your knives sheathed and your eyes on the job.

The party's internal enmities and its ability to self-destruct - liabilities that toppled former Prime Minister Kevin Rudd from power and all but tipped Labor into the abyss - will need to be swept aside if it is to remain in office for the next three years.

Gillard is governing only by the agreement of Greens MP Adam Bandt and independents Tony Windsor, Rob Oakeshott and Andrew Wilkie, who have all placed stability and good management at the head of their requirements for support.

None has given assurances other than to support supply and most confidence motions, which means Gillard can only guarantee finance bills will survive the House of Representatives and pass to the Senate.

Windsor and Oakeshott have reserved the right to move their own motions of no-confidence in the Government if they decide it is going off the rails, almost certainly in that event dooming it to destruction.

"Well, we've got provisions for no-confidence if they're not performing well and there could be a change of baton on the floor of the Parliament," Windsor told the ABC.

Gillard conceded the point: "I am going to be held to higher standards of accountability than any Prime Minister in the modern age."

Gillard is widely considered an intelligent and capable performer with good negotiating skills and the ability to reach consensus - assets that will be sorely tested in the new Parliament.

Beyond the Lower House, she faces a Senate that until next July will continue to be controlled by a combination of Greens, Family First and independent senators.

When the new Senate sits, the balance of power will lie with nine Greens senators who, although more sympathetic to Labor than the Coalition, will be pressing their own agenda.

"Our job there is to ensure that we make Government, and indeed Opposition, accountable, so we'll have our hands full," leader Bob Brown said.

Among his priorities will be a carbon price and the formation within a month of a new climate change committee promised by Gillard as part of her deal to secure Bandt's support in the House.

Gillard's immediate job will be to form her new ministry.

She has said she will follow Rudd's lead and make her own decision without factional pressures, and is expected to make significant changes to fill vacancies left by retiring ministers Lindsay Tanner (finance) and John Faulkner (defence), the decision yesterday of Veteran Affairs Minister Alan Griffin to move to the backbenches and the defeat at the election of parliamentary secretary Maxine McKew.

Wayne Swan will remain Treasurer and Deputy Prime Minister, Oakeshott is considering the offer of a new Regional Affairs Ministry, and Gillard has confirmed that Rudd will return to a senior Cabinet post.

Oakeshott has yet to decide if he will accept, and it is expected Rudd will be offered the foreign portfolio - despite external doubts and criticism - although he has also indicated an interest in indigenous affairs and health.

Gillard said she expected her new Cabinet to be sworn in next week.

But there are already clouds on her horizon, with Windsor concerned that contrary to his understanding of the deal that secured his support, Labor's mining tax may not be included in a promised tax summit.

Swan said yesterday that the Government was committed to the tax, which would provide A$6 billion ($7.6 billion) of the A$10 billion regional assistance package Gillard agreed to provide as part of the deal with Windsor and Oakeshott.

Gillard will also be facing "ferocious" scrutiny from an aggressive Opposition.

Abbott said he would not be trying to lead a rush for another, early, election, but warned that Labor's grip on power remained vulnerable.

"How quickly we go back to an election depends entirely on the performance of this Government," he said.

THE CABINET

Prime Minister:

Julia Gillard

Deputy Prime Minister and Treasurer:

Wayne Swan

Foreign:

Julia Gillard is expected to appoint her predecessor Kevin Rudd as Foreign Minister. A senior Labor source said Rudd was likely to get "the portfolio he asks for". Neil James, of the Australia Defence Association, said Rudd would not be acceptable as Defence Minister if he missed out on foreign affairs.

Defence:

Foreign Minister Stephen Smith is expected to switch to defence, vacated by John Faulkner. Greg Combet also has been mentioned as a possible Defence Minister, having proven himself in the junior defence portfolio.

Regional affairs:

The Cabinet could make history if independent Rob Oakeshott decides to take up the Labor leader's offer to make him Minister for Regional Australia

Finance:

Chris Bowen has been mentioned in Labor circles as an "easy choice" to become Finance Minister in the wake of Lindsay Tanner's retirement.

Expected to be promoted:

Jason Clare, Mike Kelly, Gary Gray and Mark Dreyfus, the only QC in Parliament.

Facing changes:

Immigration Minister Chris Evans and Environment Minister Peter Garrett may get reduced duties in the wake of problems with dealing with asylum seekers and the failed insulation scheme. Anthony Albanese's massive portfolio of infrastructure, transport and regional development is tipped to be split up to allow for the new regional ministry and ensure he can devote plenty of time to his essential role of Leader of the House. A possible change in duties for Simon Crean could see his role limited to either workplace relations or education.

- AAP