AMP Capital

The Australian Federal election has delivered a messy result suggesting a more difficult Senate for the Coalition if it can form government and the risk of a return to minority government. The risk is that we will see a further slippage in the budget outlook – with a downgrade in Australia’s AAA sovereign rating looking increasingly likely – and that significant economic reform will remain off the agenda. This is a dampener for long-term economic growth and share market returns. However, it’s not a disaster as the period of true minority government over 2010-13 saw the economy continue to grow, and it’s not unusual for Australian governments to face a difficult Senate. If the Coalition can form government, it will have little chance of passing certain aspects of the Budget including company tax cuts, superannuation changes, and the still to be passed savings from the 2014 budget. Read more in the latest Oliver's Insights: (VIEW LINK)



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