Statecraft News

Hung - As predicted in the polls, Australia has its first hung Parliament in 70 years. In the absence of polarising national policy differences between the major parties, the election broke down into a series of state, regional and local contests. Many commentators have erroneously suggested this is the first time State factors have featured so heavily in a Federal election.

As public polling shows the 2010 Federal election becoming an increasingly close race, the Statecraft team is carefully modelling the political, legislative and market consequences of a hung Parliament for its client base. The last hung Parliament in Australia was in 1940. The Australian economy is fundamentally more reliant on international factors in 2010 than it was 70 years ago.

The outcome of the ACT Senate race could have an immediate impact on the on the policy agenda of whoever wins Federal election 2010. Unlike the States, the Territories only elect two Senators at each Federal election. These Senators take their seats immediately, whereas Senators elected in the States will not take their seats until July 1 2011.

Statecraft analysts are closely monitoring the policy development processes of the Labor, Liberal, National and Green Parties ahead of the imminent Australian Federal election. For a number of Statecraft clients, the Federal election is likely to have a material impact on their activities. While many observers are closely observing the policies of the major parties, Statecraft analysts are cognisant of the fact that whoever wins the election is likely to face a recalibrated Senate after the Senators elected at this election take their seats on July 1 2011.

Statecraft is advising a number of inbound investors and domestic resources companies around the development and legislation of the Federal Government’s new Mining and Resource Rent Tax (MRRT).  The MRRT was announced on 2 July 2010 following extensive negotiations between the Federal Government and three major mining companies.  The shift to the MRRT represents a substantial change in the proposed taxation arrangements for resources under the Federal Government’s previously proposed Resources Super Profit Tax, which created significant uncertainty for investors and re