CANBERRA: Australian Prime Minister Julia Gillard`s hopes of forming a minority government received a boost on Thursday with "kingmaker" independents criticizing her conservative rival for refusing to meet a key demand.

Gillard`s Labor party seems to be ahead in early negotiations to form government, having agreed to all seven of the initial requests by the crossbench MPs, and with three of them backing Labor`s plans for a new resource tax.

Financial markets are hoping for a conservative government that would kill Gillard`s plans for a 30 percent mining tax and a price on carbon emissions, as well as her Labor government`s planned $38 billion broadband network.

Counting was continuing in the inconclusive election, with the latest tally at 73 seats for the Liberal-National coalition, 71 for Labor, with five independent and Green MPs and one seat in doubt in the 150-seat lower house of parliament.

To form a government a major party needs 76 seats.

Respected ABC news pollster Antony Green now predicts the conservatives will win 73 seats and Labor 72.

Independent Tony Windsor said Abbott`s refusal to have his election policies costed by the treasury was like "a bucket of concrete around one foot" in the race to form a government.

"It`s not a good start at all, because when we go to this issue of stability (of government) ... what we`re trying to establish here is a degree of trust," Windsor said.

INVESTMENT HIT BY UNCERTAINTY

Uncertainty over Australia`s mining tax, with conservatives pledging to kill the tax if they form a government, was partly to blame for an unexpected fall in business investment in the last quarter, CommSec securities said on Thursday.

Global asset management firm Bennelong Security Global Investors on Thursday told The Australian newspaper that telecommunications giant Telstra was "uninvestable," due to the political uncertainty around the broadband project.

The three independents have made seven demands to Gillard and Abbott, including briefings on resources, broadband policy, health, climate change and energy, defense, education, employment laws, infrastructure and transport, and agriculture.

Abbott said he would not agree to have his policies costed by treasury as earlier costings were leaked to the media. "Now if he looks so bad, and he`s got something to hide, it makes it much more difficult for us to give him the gong to become prime minister," said stetson-wearing independent Bob Katter.

Gillard has agreed to all seven requests and also offered to surrender her right to decide the next election date, a political ace for a prime minister, and agree with the three independent and Green MPs on the date.

One of the few positive signs for Abbott on Thursday was a Daily Telegraph newspaper opinion poll showing a majority of voters in the rural electorates of the three independents wanted them to back conservative leader Abbott into power.

Australia`s rural voters traditionally belong to the socially conservative end of politics.

Both Gillard and Abbott have agreed to serve a full three-year term and not have an election before August 2013.

Talks on forming Australia`s minority government could stretch into late next week after the completion of vote counting, including many thousands of votes that were sent in the post and have yet to be delivered.

BDST: 1444 HRS, August 26, 2010