The Australia Federal Election 2019 Outcome: Business as usual

The Coalition sets to remain in power in the Australia Federal Election 2019. As we anticipated, the uncertainty has prevailed with potential swing votes towards the Coalition . The result reflects Australian s favour less taxes and a smaller government with concern s on asset prices, economic growth and border security in general. A Coalition government means infrastructure, energy, taxes and labour policies will remain status quo, and we offer our view on key sector s below. Strong demand from rising population and emerging e-commerce trend means infrastructure demand will continue to be strong for Australia. T he promise that the Coalition commits investment on infrastructure but with fiscal surplus mean there will be more opportunities for private investment and asset securitization. The property cycle will continue to experience correction and the election outcome is not going to revert the trend immediately. However, t he status quo by the Coalition on negative gearing and capital gain tax mean the downward pressure is lessened. A less ambitious renewable energy goal and a laxer regulatory environment entail less short term risks for the overall mining and energy sector. The transition to green energy will continue but at a slower progressive pace, which gives coal miners more breathing space domestically. LNG exporters will also benefit as the risk of gas export control trigger based domestic energy price is now dismissed . However, utilities will continue face tighter rules amid the concern over surging energy prices. Retail and hospitality are the two sectors with the highest reliance on part time jobs with significant share of employment in Australia. T he Coalition is more market oriented on minimum wage and employment policies, indicating the two sectors will have lower risks from higher labour cost. For financials , a Coalition win also means health insurers will not subjected to a premium cap. However, the aftermath of the Banking Royal Commission mean banks will continue to face regulatory pressure. With commitment in infrastructure investment, lower taxes and unchanged labour and wage policies, the election outcome means “business as usual”. The risks in a government change are dismissed but challenges in economic transition, productivity and geopolitics will remain important for the Coalition government and future growth.