Well, it’s official! ScoMo has announced Australia will be going to the polls on May 18th so our economic guru Dr Shane Oliver is here with his take on the Federal Election and how it could affect domestic markets.
His key points are as follows:
- Australian elections tend to result in a period of uncertainty which has seen weak gains on average for shares followed by a bounce once it’s out of the way.
- With Labor promising higher taxes, larger government and more intervention in the economy the May election presents a starker choice than has been the case since the 1970s & so suggests greater uncertainty than usual.
- Labor’s higher tax and regulation agenda may be a negative for Australian assets, but this could be partly offset in the short term by more targeted fiscal stimulus.
- To return to decent wage gains requires a productivity-enhancing reform agenda & much lower unemployment. This election is unlikely to deliver much on the former.
To read the full article please click here.