Dilbert_X wrote:
The effect of the change of government.
An idea is still better than failed waffle and hand-waving.
A bad idea isn't. This is a thought bubble and a ridiculous one at that.
As to a change of government - all businesses really want is a return to business and consumer confidence and the only way to achieve that is by returning to a majority government. The perception is that this creates stability - not necessarily true but in regard to stock markets perception is key. Most of them don't really care whether the LNP are in Government or the ALP. After the election, so long as there is a majority government, you probably will see a sharp rise. You usually do after an election is over, the only reason that didn't happen last time is because people didn't know how to react to a minority government.
Of course if Abbott wins stability is going to depend on whether he can work with the Senate and if the Greens retain the balance of power he'll be in a difficult position. He says he expects them to honour the mandate given to him by the Australian people and allow him to scrap the mining and carbon taxes, (or Rudd's ETS anyway which Abbott considers the same thing,) as well as put through his PPL scheme but that's unlikely. On the latter count at least the Greens may be his saviour given that they like the idea, though they want to bump it up for low income earners and cap it at $100k which would actually make it cost more. And it's only half-costed as it is. Plus if claims in the National Party in particular are true about people saying they are willing to cross the floor over it it may turn into a bit of a circus.
As for actual policies that will influence the markets... meh. Abbott's 1.5% company tax reduction is a sweetener for sure but for the biggest companies this gets swallowed up by his 1.5% PPL levy, (which isn't a tax because of reasons.) Smaller businesses will appreciate it but they'll be in a similar position under Rudd's plan to cut GST reporting by 75%. If Abbott manages to scrap the carbon tax it may provide a boost for a few sectors but as it isn't going to address issues like the cost of electricity it won't do anything for the economy at large. As to the mining tax - Twiggy Forrest announced record profits the other day, he's fine with or without it, (he'd just rather not have to pay, wouldn't we all.)
Worthy reading: Saul Eslake's attempt this week to balance the Coalition's books re: savings and spendings. Spoiler: He's found the Coalition needs to make up just over $30b to reach its aim of having a budget bottom line 'no worse than Labor'. The Coalition has already rejected this of course but Eslake's a pretty sharp bloke and I'd trust him over the Coalition's "Everything's fine, just wait 'till we release it" and Labor's arse-dwelling figure of $70b.
