With votes still being counted to determine remaining Senate seats, the biggest surprise is that the Government, the Opposition and the Greens all lost support to minor parties.
This shows increased disengagement and political disappointment among large sections of the community.
The last Parliament and the media jousting among the parties was negative and nasty, and prevented much of the work of Government. So it is clear that the electorate has responded badly to that behaviour and punished them all.
However, recent statements from political leaders indicates their understanding of this and their commitment to change. So despite the new Senate looking even more fractured than the previous Senate, Labor, Liberal National, and Green leaders are all talking of more cooperation and respectful debate.
So one outcome of this election is likely to be more listening and leadership, and greater willingness to compromise on the part of Government and their main opponents.
One immediate positive for business might be Opposition and/or Green support for the first round of business tax cuts since they are only for small businesses. Labor has already said it would support cuts of 27.5 per cent for businesses up to $2 million in annual sales from 1 July. This gives hope that they may also be persuaded to support the same cuts to businesses up to $10 million in sales during this term of Government. The cuts proposed for larger businesses are only due after the next election, so may not threaten tax relief for smaller companies.
Two other interesting developments occurred to support this. A few weeks before the election the Opposition leader acknowledged the seriousness of the rising budget deficit and Government debt. And rating agencies restated after the election earlier warnings that Australia’s AAA credit rating would be put on a watch list unless the Government showed a clear path to surplus. They nominated this path needs to be apparent in about six months.
All this is happening in an environment where business confidence is slightly up, and consumer confidence is slightly down.
Wages and business margins remain flat, minerals commodity prices remain low and the Australian dollar is too high according to many economists. These are the reasons fuelling speculation that the Reserve Bank of Australia (RBA) Board will reduce the target “cash rate” when it meets on 2 August. This also would show the RBA’s ongoing caution about the Australian economy and global economic conditions likely to affect it.