Business SA chief Nigel McBride told InDaily the looming prospect of a hung parliament – or a narrow majority raising the spectre of subsequent Liberal infighting – was a blow for business.
“We saw that in the Gillard era, with lots of uncertainty,” he said.
He argued the situation mirrored that in the UK in the aftermath of the Brexit referendum, when experts declared that “the market can handle good news and it can handle bad news, but what the market can’t handle is uncertainty”.
“And I think that applies here,” he said.
“We can handle a clear outcome – whether good news or bad, in the minds of the investment and business community… what we can’t handle is uncertainty.
“This is the winter of voter discontent… there’s an enormous amount of discontent with the major parties.”
McBride said that the rationale behind the double dissolution, to rid Malcolm Turnbull of a “dysfunctional senate”, had backfired.
“We haven’t really changed the fact the senate still going to be hostile, we’ve just changed some of the faces,” he said.
McBride does concede that the continued rise of Nick Xenophon’s influence would mean that “SA might be seen initially as a winner”.
“We used to be regarded as relatively irrelevant, and that’s fundamentally changed,” he said.
“We know Nick Xenophon is incredibly parochially pro-South Australia, in a good sense, but that cuts both ways.”
He warned other interstate crossbenchers, most notably from the resurgent One Nation, could wield similar influence on behalf of their own regions, and “the truth is people are going to leverage outcomes that may not be dripping in merit”.
Ratings agency Fitch has warned that Australia’s AAA credit rating could be at risk if “political gridlock” impacts the federal government’s ability to manage public finances.
“Political gridlock that leads to a sustained widening of the deficit would put downward pressure on the rating, particularly if the economic environment deteriorates,” its Asia-Pacific sovereigns group director Mervyn Tang said today.
Australian Institute of Company Directors CEO John Brogden said the coalition, Labor, independent and minor party MPs must agree to a swift resolution in the event of a hung parliament and form a government as a matter of urgency.
“This election result is the worst possible outcome for Australia,” Brogden said.
“We need certainty and an environment for long-term policy making.”
Brogden said it took weeks to form a government the last time there was a hung parliament in 2010.
“Australia cannot afford weeks or months of uncertainty.”
Australian Chamber of Commerce and Industry CEO James Pearson called on crossbenchers in the House of Representatives and Senate to move beyond the narrow agendas on which they campaigned and make decisions in the national interest.
“We cannot afford another three years of policy gridlock,” Pearson said.
Business still hopes a clear election result and a functioning parliament will emerge when counting continues, Australian Industry Group chief executive Innes Willox said.
He said whoever wins has to deal with a significant array of challenges including taxation, workplace relations, budget repair and employment creation.
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