Australia's conservative opposition has agreed to allow Treasury officials to analyse its election promises, removing a major obstacle to talks with five independent and Green MPs on forming a new minority government, Prime Minister Julia Gillard said on Friday.
Labor's Gillard had already agreed to release her government's costings and said she had productive talks on Friday with the Green MP towards forming government.
But Australia's political deadlock is no closer to resolution, with continued vote counting in the inconclusive election which resulted in a hung parliament, and talks expected to drag into late next week or the week after.
Neither Gillard nor conservative leader Tony Abbott won a majority at the August 21 poll and both need 76 seats to form a government in the 150-seat lower house. The conservatives have provisionally won 73 seats, while ruling Labour secured 72 seats.
Speculation had emerged that Abbott was manoeuvring for another vote after his Liberal-Nationals coalition edged ahead of Labour on seats, and he earlier refused to have his policies costed by Treasury.
I am pleased to report that Mr Abbott has generally agreed that the independents should be able to get the material that they seek, Gillard said after talks with Abbott's office. I welcome Mr Abbott's general agreement to that.
Five independent and Green MPs will now decide who forms a minority government.
Markets are hoping for a conservative government to kill Gillard's plans for a 30 percent mining tax, a price on carbon emissions, and a $38 billion broadband network.
Australians are betting that any minority government formed in the next few weeks will not last a full term and fresh elections will be called in 2011, said an online bookmaker.
And at least one analyst said a new poll could be seen as a positive development and preferable to an unstable government.
If the alternative was an election or an unstable government where there was no major policy decisions being made, then I think an election would be preferable, Macquarie Bank senior economist Brian Redican said.
However, the election itself is a distraction for business and consumers. You can get temporary pauses in spending. Having two elections close together could be a real problem for business in the second half of 2010.
Greens leader Senator Bob Brown said talks with Gillard were very constructive. The Greens said in the campaign that they preferred the Labour government.
We are working to see if a Labour government can be formulated, Brown told reporters after the meeting, adding Abbott had not yet organised a meeting.
The stability of a minority government is a major negotiating issue for the five kingmaker independent and Green MPs, prompting both Gillard and Abbott to pledge they would serve a full term. Gillard has even offered to set the date of the next election, due by late 2013, with the five.
Online bookmakers Sportingbet said the odds were shortening for an early election, possibly in 2011, to sort out the impasse.
Punters know that any minority government would face plenty of problems and the new prime minister, whoever that may be, could be forced to call an early election, Sportingbet Australia chief Michael Sullivan said.
(Editing by Michael Perry)