Australia ‘open for business’

Strong pro-business rhetoric has followed a landslide election win for Tony Abbott’s centre-right Liberal National coalition.

The Prime Minister-elect said: “From today, I declare that Australia is under new management and that Australia is once more open for business,” in his Saturday night victory speech. However, his upbeat confidence has been questioned by analysts throughout the country, who point to the lack of big policy differences between the two main parties and external drags, such as the end of an unprecedented surge in mining investment.

“Whichever government came in, I don’t think it’s the easiest of elections to win because you’ve still got a lot of headwinds from China slowing and from the domestic economy not having any mojo,” Martin Whetton, a strategist at Nomura told the Financial Times.

The Reserve Bank of Australia has put his confidence in housebuilding after cutting official interest rates to a record low of 2.5% over the past two years. Since 2008 Australians have preferred saving over spending, despite a growth in incomes and a low unemployment rate. Although business sentiment has risen in the aftermath of the election, consumer confidence has been constricted.

In an attempt to drive investment, Abbott has proposed a repeal of taxes on carbon and mining profits, the cutting of 12,000 public sector jobs, and a tax cut of 1.5% for small businesses. Under these proposals the budget will be about A$8.8bn smaller by the year ending June 2017, equivalent to about 0.5% of GDP.

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