Bipartisan approach needed now for incremental reform
The outcome of Saturday’s Federal Election result is still unknown.
It is looking likely that the Coalition will fall one seat short of a majority and require the support of at least one Independent to maintain power.
What we do know is that a hung Parliament would be the worst possible outcome for the business sector.
As CCIQ noted after the close Queensland State Election and is equally pertinent now: a majority government of any colour will always trump a minority government of any colour.
Business needs certainty
Business requires certainty and stability to make investment and employment decisions.
A hung Parliament cannot deliver the policy certainty that business requires, with the fallout from the election result placing the Coalition’s policy agenda and 2016-17 budget in the firing line.
To this end, we may not see substantial economic or industrial relations reform for some time. Indeed, many of the election campaign promises may fall by the wayside.
We know that the Coalition’s tax reform package did not resonate with the electorate, and that proposed superannuation reforms hit the Coalition base.
It appears that voters were less worried about budget deficits if spending was directed towards health and education, as reflected in key marginal seats.
Fringe politics widespread
Furthermore, around 25 per cent of the Australian electorate pledged their vote outside of the major parties, reflecting Australia’s embrace of the kind of populist anti-establishment politics similar to that playing out in Britain and the United States.
The potential Senate make-up puts further free trade deals on the backburner as well, with a trend towards protectionist trade policies and industry-assistance styles schemes in the likely crossbench.
Malcolm Turnbull’s attempts to get a more Government-friendly Senate, via a double dissolution, appear to have spectacularly backfired.
Business is concerned that without a strong majority Government, measures to reduce the structural Budget deficit will be avoided to placate the special interests of a hung Parliament and a populist Senate crossbench.
Ratings agencies are likely to respect to the lack of appetite for reform by reducing Australia’s AAA credit rating, putting the dollar under pressure and bringing on another rate cut in August.
A bipartisan approach to incremental reform
No matter what the final outcome of the election result, one lesson learned is that the business community must re-think the way it makes the case for substantial economic reform.
With incremental reform now on the cards, the large-scale changes previously called for – such as the GST and significant tax reform – are now, to quote a former PM, “dead, buried, and cremated” (at least in the short and medium term).
The business community must rally together to oppose the anti-business mindset of fringe parties, candidates, and representatives.
CCIQ will continue to argue the case for comprehensive reform by engaging in analysis and thought leadership in an effort to convince both sides of the Parliament that a bipartisan approach is required.
We will also engage in evidence-based advocacy to ensure the case for economic reform is a nation-wide ambition and transcends party lines.
After all, a confident and successful business sector will reap a strong economic environment, from which all Australians will benefit.