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Uncertain election outcome makes for risk of losing AAA rating


Turnbull newThe final outcome of the federal election held July 2 is still unclear, but what is already obvious is that Opposition leader Bill Shorten has narrowly failed in what has been a remarkable effort to unseat the Coalition, while prime minister Malcolm Turnbull has no real mandate for his platform of company tax cuts and trade union reform.

Athough neither of the two main parties achieved their objective, the outcome will be a blow to the ambvitions of the Greens, who lost one seat in the Senate, and failed to improve on their one seat in the House of Representatives.

Turnbull may yet achieve an overall majority of one or even two seats in the House of Representatives, but will face an ongoing revolt from the right-wing of his party that could endanger his proposed changes to superannuation taxation arrangements that have enraged many of the party’s supporters.

Assuming that Turnbull forms a new government when the final result becomes known on or after July 5 , he will also try to put its legislation to reintroduce the watchdog to monitor and stop corrupt and bullying behaviour by unions in the construction industry before both houses of Parliament when they are recalled next month. Unless Turnbull can hold on to his overall majority,  the Senate will reject the bill.

The only certainty from a messy, long and generally unsatisfactory election campaign is that Australia’s burgeoning Budget deficit will continue to increase in coming months. This almost certainly will involve Australia following Britain down the path of losing its AAA rating, making for uncomfortable times ahead.