'Kingmakers' make new demands

Australia's political gridlock inched nearer to a resolution that would provide market certainty yesterday after "kingmaker" independent lawmakers set new demands as the price for their support for a minority government.
Prime Minister Julia Gillard's Labor is fighting to hold on to power after neither of the main parties won a majority in August 21 elections. Her rival, conservative opposition leader Tony Abbott, wants to scrap a proposed mining profits tax and emissions trade plans, as well as a $38 billion telecoms project.
Both leaders are courting a handful of independent and one Green lawmaker to get the 76 parliament seats required to rule.
One of those independents, Tasmanian Andrew Wilkie, presented Gillard and Abbott with his 20 priorities, ranging from a price on carbon to limits on slot machines and pension increases.
"They have both got work to do. I'm heartened by the response of both parties today, very heartened actually," Wilkie told reporters after talks with Gillard and Abbott.
"I would certainly hope that all of the independents have made their decisions, and we all know the shape of the political landscape in Australia, by the end of the week."
Another independent, Bob Katter, said he was also drawing up demands for his outback Queensland seat, which sprawls over an area twice the size of the United Kingdom.
The uncertainty over which party will gather the support to form government has unsettled markets, and JP Morgan said on Monday it could unsettle investors for weeks.
"A layer of persistent political risk ... against a backdrop of heightened uncertainty over the state of the global economy, will weigh on investor sentiment and AUD (Australian dollar), in particular," the bank said in a research note.
However, Australian shares shook off the uncertainty, rising 1.9 percent to reach a post-election high, led by mining stocks on the back of stronger world metal prices.
Investors are concerned Gillard could make major concessions to the sole Green MP, Adam Bandt, and Wilkie -- a former Greens party member -- to build a working majority.