Gillard signs deal with Greens

Australian Prime Minister Julia Gillard has struck a deal with the Greens as Labor tries to secure a majority.

Green MP Adam Bandt signed a formal agreement with Ms Gillard in her Parliament House office this morning.

They were joined by Deputy Prime Minister Wayne Swan, Greens leader Bob Brown and his deputy Christine Milne.

With 73 seats, Labor now would need an additional three seats to form a minority government - as would the conservative coalition - but Labor controls the caretaker administration in the meantime under Prime Minister Julia Gillard.

Opposition leader Tony Abbott's conservative Liberal Party-led coalition also holds 73 seats, and both sides are negotiating with independents to gain more seats.

Abbott said the Labor-Greens deal meant that a Labor government would impose a carbon tax on Australians, increase taxes on mining profits and reduce government funding for private schools.

"Clearly the Greens will be in the driver's seat of any renewed Gillard government," Abbott told reporters.

In return for Mr Bandt's support, Ms Gillard has offered to set up a climate change committee, make investments in dental care as well as $A20 million to look at high-speed rail on the east coast.

There will also be a parliamentary debate on Afghanistan and restrictions placed on political donations.

The government had also agreed to move towards holding a referendum to change the constitution to recognise indigenous people and local government, Senator Brown said.

Senator Brown said this all remained a work in progress, and that Mr Abbott said he would attack any agreement the Greens signed.

"I reminded him that he may well be the prime minister next week although we favour Julia Gillard leading the next government of Australia and are working to that end quite clearly," Senator Brown said.

"We are the first people in this balance of power in both houses to make a decision. We think that will help lead to others making a decision."

Senator Brown said if Mr Abbott became prime minister, he would then meet him to work out processes for how the Senate would work.

"I give a commitment here to whichever is the next government - our job is to provide the best Senate accountability for that government and we will do just that."

Abbott said he was having "good discussions" with three independents, who have been negotiating as a bloc with the major parties and are all former members of a conservative party, in his bid to become prime minister

Earlier today, independent MP Andrew Wilkie said an offer made to him by Ms Gillard to gain her support in forming the next government was "unsatisfactory".

Mr Wilkie, who pulled off a shock result in the Hobart seat of Denison in the August 21 election, said he had hoped to have a decision on who he would support by today.

He said Ms Gillard was the first of the two leaders to make him an offer.

"It is unsatisfactory, I'll be in back in touch with her today or tomorrow to talk some more," he told ABC Radio on Wednesday.

"I am flying to Canberra today to have a follow-up meeting, I expect, with the opposition leader."

Mr Wilkie said the 20-point list of priorities released to the media on Monday was not a wishlist or a list of demands.

"It's more like a manifesto, it's basically laying out 20 odd areas of concern that I have and which I aim to focus on during the first term of parliament," he said.

"I'm focusing on two things initially in particular and that's the need to fix the Royal Hobart Hospital and the need to reform poker machine legislation."

He said it was in the national interest to have a result "as quickly as possible".

"This period of uncertainty is not good for people, it makes them anxious, it makes business anxious," he said.

- AAP, AP