JOIN USMinority govt stares Oz in face
The vote looks so close, the result may have nothing to do with policy but simply come down to which leader, Prime Minister Julia Gillard or the opposition’s Tony Abbott, voters like best.
The uncertainty helped pressure the Australian dollar on Friday. The Aussie was quoted at $0.8910 (573 pence) by late afternoon, down 0.85 per cent from late on Thursday, while the benchmark stock index fell 1 per cent.
Market uncertainty
One financial analyst has tipped a 2-5 per cent fall in the currency if Australia has a minority government.
Assistant Treasurer Chris Bowen said the election was so tight that a hung parliament was just a likely as either a re-elected Labour government or a victory for the conservative coalition.
“It’s just so close that any of those are eminently possible,” he said after a Newspoll survey showed Labour and the opposition even with 50 per cent of the two-party vote.
Without a clear winner, the next government would have to rely on a handful of independent or Green MPs to form a government, leaving policies such as Labour’s new mining tax in limbo and creating market uncertainty.
“Given the fact that around 40 per cent of Australia’s market is owned by foreign investors, any uncertainty can have a detrimental impact on markets,” CommSec equities economist Savanth Sebastian said.
“If you start seeing a hung parliament or a minority victory, then the Aussie dollar could certainly come under some pressure, and likewise share markets.”
Two of the three key independents, who may decide who takes office in the event of a hung parliament, have said they cannot guarantee passage of a minority government budget, leaving the possibility of a fiscal crisis or a short-lived government. Even a razor-thin win by Gillard would diminish her mandate to introduce the 30 per cent resource tax, the cornerstone policy of her campaign, and leave her weakened as she seeks to have a hostile Senate pass the tax.
Labour has also pledged to take action on climate change with a possible carbon trading scheme and to construct a $38 billion (24 billion pounds) fibre-optic national broadband network. The Liberal-National opposition opposes these plans.
Gillard deposed former Labour Prime Minister Kevin Rudd on June 24 in a desperate bid by the party to avoid electoral defeat, but she has struggled to woo voters, with many angry at the party coup that dumped Rudd.
Reuters
Croc predicts Gillard victory
Dirty Harry, the saltwater crocodile, has picked, or should that be bitten, Australia’s Prime Minister Julia Gillard to win Saturday’s cliffhanger general election.
Given the choice of two dead chickens, one with Gillard’s face stuck on the carcass and the other with opposition leader Tony Abbott’s face, Harry snapped up Gillard. The Abbott chicken carcass was left hanging at Crocosaurus Cove enclosure in Darwin. Harry, who weighs 720 kg and is about 5 metres long, correctly picked Spain to win the soccer World Cup last month, just like Paul, the “psychic” octopus who became a media star.