Counting to resume in Australia's election cliff-hanger

By Reuters/Matt Siegel, Jane Wardell, Wayne Cole   July 4, 2016 | 09:56 am GMT+7
Counting to resume in Australia's election cliff-hanger
Australian politician and leader of the One Nation Party Pauline Hanson holds an election placard as she stands with supporters during a function on election night in the city of Ipswich, west of Brisbane, Australia, July 2, 2016. Photo by AAP/Dan Peled/Reuters

Vote counting resumed on Monday in a dramatic Australian federal election but a winner is not expected to be announced for several days, raising the prospect of prolonged political and economic instability.

The exceptionally close vote leaves Prime Minister Malcolm Turnbull chasing support from key independent and minor parties - the very groups he called a risky double dissolution election to circumvent - to retain power.

The opposition Labor Party is also schmoozing with a quartet of new power brokers who are yet to declare support for either side, as rumbling grows about Turnbull's future as leader of the centre-right Liberal Party-led coalition.

The election on Saturday was meant to put a line under a period of political turmoil which has seen four prime ministers in three years. Instead it has left a power vacuum in Canberra and fuelled talk of a challenge to Turnbull's leadership of the Liberal Party, less than a year after he ousted then prime minister Tony Abbott in a party-room coup.

The Australian dollar dipped in early trade on Monday after no clear winner emerged, pointing to policy paralysis ahead and perhaps threatening the country's triple A credit rating. The local dollar started around half a U.S. cent lower around $0.7435 but soon edged back up to $0.7469 in light volumes.

Australian shares could also be hindered by the inconclusive result. The local share price index futures was still up 0.6 percent at 5,235, an 11-point discount to the underlying S&P/ASX 200 index close. The benchmark had risen for a third straight session on Friday to end the week 2.6 percent firmer.

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Australian Prime Minister Malcolm Turnbull smiles as he is surrounded by members of the media departing his home located in the Sydney suburb of Point Piper, Australia, July 3, 2016. Photo by AAP/David Moir/via Reuters

Turnbull said on Sunday he remained "quietly confident" of returning his coalition, which retains government in a caretaker mode until a winner is declared, to power for another three-year term.

But Andrew Wilkie, one of the four key independents, said the vote showed that Turnbull has no mandate to impose his election agenda, which included cuts to healthcare and a A$50 billion corporate tax break over 10 years.

"Neither the Labor Party or the Liberal Party have a God-given right to rule," Wilkie told ABC radio, adding he was adamant he would "do no deals."

A second independent, Cathy McGowan, also said she did not intend to decide which side to support until the votes were counted and parliament resumed.

"There is enormous disappointment with the way the government has been working," McGowan said.

Vote counting for the Senate resumed on Monday but counting for the House of Representatives does not restart until Tuesday, leaving the precarious position of the lower house in limbo. The delayed counting is a result of new security measures imposed by the Australian Electoral Commission.

Before counting was paused on the weekend, the Labor Party had won 67 seats to the coalition's 65 with the Greens Party picking up one seat and independents claiming four.

With the result of 13 seats still in doubt and either side needing 76 seats in the House of Representatives to form a majority government, political pundits are predicting one of two main scenarios: the coalition scrapes across the line by picking nine or more of the undecided seats, or it doesn't reach the 76 mark and has a hung parliament where neither side holds power.

Small parties are also likely to do well in the Senate, with Pauline Hanson's One Nation on track to win between two and four seats, marking the return of the right-wing anti-immigration activist to parliament after an almost 20-year absence. 

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Centrist independent Nick Xenophon distributes biscuits as he stands next to an orange motorcycle, that has been his semi-official touring bus, in the South Australian capital of Adelaide, Australia, July 2, 2016. Photo by Reuters/Matt Siegel

Centrist independent Xenophon emerging as kingmaker

As Australians cast their ballots in a tight election on Saturday afternoon, senator Nick Xenophon worked up a sweat while preparing kebabs at a Greek restaurant in his hometown.

"Nick, if you no get across the line tonight, I give you a job," owner Yianni Tsagariolis shouted in a thick Greek accent, drawing laughter from Xenophon supporters who had gathered at the restaurant.

But with early results showing the Nick Xenophon Team (NXT) party winning between three and five Senate seats, it became clear the restaurant's charcoal grill was the only reason for Australia's next political kingmaker to break into a sweat.

Australians went to sleep without knowing who will be prime minister, but the eventual election winner -- whether the ruling conservative Liberal-National coalition or the opposition Labor Party -- will likely need to negotiate with NXT senators to pass key legislation.

With almost 10 million votes counted on Saturday, the parties were in a near dead-lock. It is expected to take several days to determine a winner.

Far-right politician Pauline Hanson also looks set to win a position in the upper house.

NXT candidate Rebekha Sharkie, who won the party's only lower house seat, may even have a say over who becomes prime minister should the election lead to a hung parliament.

Xenophon, a former suburban lawyer who has served in the Senate since 2008, built his position by exploiting widespread political fury sparked by former Prime Minister Tony Abbott's 2014 decision to buy a A$50 billion ($37.48 billion) fleet of 12 submarines from Japan.

That decision shattered a promise Abbott had made to build the vessels in Adelaide, the capital of South Australia, and Xenophon relentlessly pushed the government to open up the process and hold a tender.

Speaking on election night, Xenophon said his party would be a voice for millions of centrist Australians who felt left out by the two major parties.

"We've broken the duopoly," he said to cheers from supporters at a campaign event in Adelaide.

"There's only been one of me in 226 seats; there'll be at least four of us and that'll be huge. That will be a base for us to build on ... that's why the majors are running scared."

In the previous election cycle mining magnate Clive Palmer briefly played a similar role before infighting led to an implosion in the Palmer United Party. Two of its senators resigned from the party.

Xenophon's party also lacks a unifying ideal beyond his personal brand, said Peter Chen, politics and media lecturer at the University of Sydney.

"Xenophon himself is obviously an experienced and disciplined campaigner and parliamentarian but he has to be able to keep his troops in order and he's never been called on to do that before," Chen said.

But a political source close to Xenophon, who asked to remain anonymous because he was not authorized to speak with the media, dismissed such concerns.

"It's a good result from a team-management perspective," the source told Reuters. "In some sense if we'd won everything we could have done, it would have been a management nightmare. All of them understand the importance of unity." ($1 = 1.3342 Australian dollars)

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