Labor retains power in Australia

Labor Party leader Julia Gillard will form the first minority federal government in Australia since 1940 after winning the support of key rural independents.

Independents Tony Windsor and Rob Oakeshott both said they would back Labor.

"I intend with my vote, for what it's worth, to support the Labor party," Mr Windsor told reporters in Canberra.

Mr Oakeshott followed suit.

"Today I'll do what I have always done, and give confidence and supply to government and in effect that means confidence and supply in Julia Gillard," he said.

That means Labor has a majority 76 votes in the 150-seat lower house.

Mr Windsor said he would support supply but would not support trivial no-confidence motions against the Labor government.

"And I will reserve the right to represent my constituency on any vote in the parliament and also reserve the right to move a no-confidence motion in the government as I see fit," he said.

The third kingmaker rural independent, Bob Katter, announced earlier in the day that he was supporting the coalition.

Mr Windsor said possibly "the most critical" issue he'd considered was broadband.

Labor has committed to rolling out a $43 billion national broadband network.

"There's an enormous opportunity for regional Australians to engage with the infrastructure of this century and ... I thought (that) was too good an opportunity to miss," he said.

"You do it once, you do it right and you do it with fibre."

Mr Oakeshott said the key issues for him were broadband, climate change and regional education.

Mr Windsor said another factor in his decision was energy policy, as he believed it was time for Australia to revisit a carbon tax or other climate policy.

"It's obvious to me that regional Australia would be a major beneficiary of a lot of the renewable energy sources," he said.

"I see enormous opportunities where others fear the whole climate change debate."

Mr Windsor also reflected on the political representation of rural voters, who he said were "assumed by one side and taken for granted by the other".

"The fact that there are country independents in this building indicates that country people have had enough of that," he said.

Rather than choosing between two different philosophies, Mr Windsor said both major parties had become the same, and the independents had taken advantage of the election outcome to advance their causes.

"If you want to be taken for granted in the future, go back to the old ways, because that's exactly what will happen to you," he warned rural voters.

"Through their various documents that they've put together, the admission is that they have neglected country Australians.

"They are attempting through this process, because of the way the numbers have been crunched, to try and rectify the situation."