Independents may help Turnbull form new Australian govt

Australia's ruling Liberal-National coalition looked set to retain power by a slim margin after three independent MP's said they would back Prime Minister Malcolm Turnbull to form a government.

As counting progressed in the federal election held last week, the coalition looked closer to achieving the 76 seats required to claim a majority.

According to the Australian Electoral Commision, the coalition had had 73 seats with Labor on 66. Five seats were held by independents: the Green Party (one), independents (two), Katter's Australian Party (one) and Nick Xenophon Team (one).

Turnbull (pictured) was in talks with the new crossbench to secure government. Independent MPs Cathy McGowan, Andrew Wilkie and Bob Katter have decided to support the government on supply and confidence issues.

South Australian MP Nick Xenophon, who will have one MP in the House of Representatives and a voting bloc in the Senate has not declared support for either side.

The government faces a tough time getting budgetary measures through. On Thursday Standard & Poor’s revised Australia’s AAA long-term credit rating outlook to negative, due to growing fiscal vulnerabilities.

The agency lowered its outlook from stable to negative, adding there was a one-in-three chance the rating could be lowered within two years if measures to improve the budget position are not passed by parliament.

“The negative outlook on Australia reflects our view that prospects for improvements in budgetary performance have weakened following the recent election outcome,” S&P said in a statement.