JULIA GILLARD is two seats away from forming a minority government after the Tasmanian independent Andrew Wilkie rejected a $1 billion offer from Tony Abbott and threw his support behind Labor.
Mr Abbott, who now needs the support of all three rural independents to govern by the slimmest majority of one, redoubled his efforts yesterday to woo Bob Katter, Tony Windsor and Rob Oakeshott.
With the three likely to announce their decision on Monday, Mr Katter gave his wish-list of 20 priorities to both leaders yesterday. It included the Coalition positions of no mining tax, no carbon tax and for local boards to run hospitals.
The Coalition is quietly confident it has won over Mr Katter but the Queensland independent said he was not leaning towards either side and hoped all three would move as one.
''Though we are not a bloc we're also not effective if we do not act collectively,'' he said.
Mr Katter said he had dinner with Kevin Rudd on Wednesday.
All three said last night they had yet to make up their minds. Mr Wilkie's support for Ms Gillard guarantees Labor 74 seats against the Coalition's 73.
A majority of 76 is required to govern, meaning Ms Gillard needs two more and Mr Abbott three.
Mr Wilkie, who wrested the seat of Denison from Labor, said his decision to back Labor might encourage the others to follow because the greater the number of seats, the more stable the government would be. If the three went to Labor, it would have 77 to the Coalition's 73. ''I think it's more likely that the ALP will get the numbers and perhaps even have a buffer to be able to provide stable government for the next three years,'' he said.
Mr Windsor and Mr Katter said they were not influenced by Mr Wilkie's decision but Mr Oakeshott said it was a factor.
Mr Wilkie said his support extended only to guaranteeing stability. He would back the government against unwarranted no-confidence motions and would guarantee supply. ''In no way should my support be taken as support for any of their policies.'' Mr Wilkie's wish-list included a new Royal Hobart Hospital and betting limits on poker machines.
Mr Abbott pledged $1 billion for a new hospital but Ms Gillard offered only to bring forward the next $1.8 billion in grants from the Health and Hospitals Fund from which Tasmania would be eligible for $340 million to refurbish the hospital. Tasmania would receive $100 million in advance and would have to apply for the rest.
Mr Wilkie, who put a premium on stability, competence and ethics, saw Ms Gillard's approach as a virtue. ''I think this is an example of seeking a more modest amount and being more conscious of proper process and more conscious of equity so that hospitals around the country can benefit from $1.8 billion.''
Coalition sources criticised Mr Wilkie, saying he told Mr Abbott $1 billion was needed for a complete rebuilding and its restoration as a teaching hospital.
He also secured agreement from Ms Gillard to place pre-commitment restrictions on poker machines to limit how much people could bet. Ms Gillard said if the states could not agree to the measure, she would look at federal legislation.
Mr Wilkie's decision was the second blow for the Coalition after Treasury found the $11.5 billion it claimed in budget savings over the next four years were short by between $7 billion and $10.6 billion.
Mr Abbott disputed the findings, saying they amounted to a difference of opinion. Even so, he said it was an argument about the size of the surplus, not spending blowouts and ultimately the Coalition would save more over the long run.
He agreed reluctantly to let Treasury cost his policies after the independents demanded it. Mr Wilkie said the blowout was a key factor in his decision to back Labor.
Mr Oakeshott and Mr Windsor were also unimpressed. Mr Oakeshott said he was ''not one to bash public servants'' such as the Treasury secretary, Ken Henry. ''In the end, you've got to back someone's judgment. I'll back him any day.''
Mr Windsor, whom the Liberals now regard as the key, said he was having trouble trusting Mr Abbott because of the costings saga. ''It's not so much about numbers as it is about what people went to the election on, and the trust that we can have in them,'' he said.
Mr Windsor and Mr Oakeshott give in-principle support a profits-based tax on mining. As the lobbying intensified yesterday, the chief executive of Fortescue Metals, Andrew Forrest, met the two over a sandwich at Parliament's Aussies Cafe.
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