Australian Prime Minister Julia Gillard on Tuesday said Australians should not be asked to return to the polls, insisting that it is parliament's job to "make it work."

Gillard was speaking to the National Press Club, on a day when Labor Party nudged back in front on the two-party preferred vote, undermining Coalition claims that the Labor Government had lost its last claim to legitimacy.

"Some say this situation is all too difficult and we should just return to the polls. I disagree," Gillard said told reporters in Canberra on Tuesday afternoon.

"The Australian people have voted for this parliament and our job is to make it work," she said.

According to Australian Electoral Commission, the two-party preferred count, which Gillard said was "critical" to which party formed government, was running 2,607 votes in Labor's favor at 12:30 p.m. on Tuesday.

Earlier, the Coalition had taken the lead, but preference flows in eight seats have not been included in the national totals.

In a 26-minute speech to the National Press Club, Gillard pledged to make changes if Labor retained power in a hung parliament.

"I want to renovate that Labor tradition, to deliver lasting and durable improvements to our democracy, improvements not just for this parliamentary term, but measures to permanently uplift our system of government as other reforms have done in generations past," Gillard said.

In order to win support to form a minority government, Gillard had given the three key independents Bob Katter, Tony Windsor and Rob Oakeshott -- who hold balance of power in Parliament -- a political reform paper flagging Labor's intended reforms.

"I think we can agree on an immediate set of reforms that would make a difference to private members business, private members bills, the operation of question time, the way the parliament works and then there are a set of longer term reforms. We would need an inclusive process to keep driving forward so I am optimistic about this."

Gillard also committed to ensuring meetings with Treasury over costings should remain open and transparent, and urged the coalition to match that pledge.