top 5 political risks for australia nov 2012

www.politicalmonitor.com.au!

Political risk in Australia!Five risks to watch in 2013!

November 2012!

!This presentation provides a brief overview of the top 5 political risks confronting investors in Australia. It presents summary views and should be taken as such.!

!The information is taken in part from our ‘Investing in an election year’ report, which examines the political risks confronting investors in the Australian market over the next 12 months.!

!More information is available @ www.politicalmonitor.com.au !

November 2012!Top 5 political risks for Australia!

1. !TRIUMPH OF POLITICS OVER POLICY!

!With no more than a year until the next federal election (no later than November 2013) Australia is entering the political silly season.!

!

Policy making will be buffeted by political calculations and short term opportunism as both major parties apply their policy judgments within the framework of marginal seat politics.!

!

Political risk: ! ! !Uncertainty & inconsistency!!


2. !CHANGE OF LEADERSHIP AT THE TOP!

While a leadership change within the Government is looking increasingly unlikely both the Government and the Prime Minister remain in a precarious position.!

Labor will need to maintain a primary vote in opinion polls of at least 35% to ensure leadership speculation does not again assume centre stage in the political discourse.!

Any change in leadership would most likely occur in the first parliamentary sitting weeks of 2013.!

!Political risk: ! ! !Uncertainty & significant policy changes as result of any

! ! ! ! !leadership transition!

!


3. !EARLY ELECTION – BUDGET DEFICIT!

The Government’s political identity is wedded to delivering a budget surplus. !!

However, with opinion polls improving slightly for the Government and considerable doubt emerging about its capacity to deliver a surplus in the current fiscal year the Government may opt for an early election to avoid having to reveal a budget deficit before a poll in the second half of 2013.!

!

Such an outcome imposes short-term risks as government decision-making will grind to a halt. However, an election may produce a majority government allowing business to benefit from a ‘stability dividend’ post the election.!

!

Political risk: ! ! !Short-term uncertainty & decision-making paralysis!

!!


4. !NEW BUSINESS TAXES TO FUND BUDGET SURPLUS!

If the Government decides an early election is not credible then it will revert to its pursuit of delivering a budget surplus.!

!

Investors should note that a surplus is a political, rather than economic, imperative and the Government will strive to deliver a surplus by hook or by crook.!

!

In addition to a range of accounting mechanisms the Government will give full consideration to new business taxes and the removal of rebates and loopholes to fund a surplus.!

!

Political risk: ! !Increased risk of new taxes!

!


5. !WA ELECTION & URANIUM MINING!

!Labor has a better chance of victory than many expect at the forthcoming election in the resource rich state of Western Australia.!

!

Labor will go to the election promising no new uranium mining approvals. Existing licenses will be honoured.!

!

Political risk: ! ! !Investors run the risk of being locked out of the industry ! ! ! ! !if approvals are not submitted in time!

!


Detailed analysis on these and other political risks confronting investors in the Australian market can be found @ www.politicalmonitor.com.au!

!

About Political Monitor!

Political Monitor is a political risk research and advisory firm. Our analysis provides insight into the implications of political risk for commercial valuations, asset selection, investment decisions, strategic planning and operational decisions. !

!


DISCLAIMER & COPYRIGHT!Political Monitor is a business name registered by DCK Holdings Pty Ltd ATF DCK Family Trust (“Seller”).!

Disclaimer !

Information in this document is subject to change without notice and does not represent a commitment on the part of Seller.!

Seller does not warrant the accuracy, completeness or timeliness of any of the data and/or programs (“Information”) available within the report. The Information is provided “as is” without warranty of any kind, express or implied, including, but not limited to, implied warranties of merchantability, fitness for a particular purpose, title or non-infringement.!

In no event will Seller or its affiliates be liable to any party for any direct, indirect, special, consequential or other damages for any use of or reliance upon the Information found within the report, or on any other reference documentation, including, without limitation, lost profits, business interruption, loss of programs or other data, even if Seller is expressly advised of the possibility of such damages.!

The disclaimer is in addition to the specific terms and conditions that apply to the products or services offered by Seller.!

Copyright!

Copyright © DCK Holdings Pty Ltd ATF DCK Family Trust 2012. This document is copyright and contains confidential information that is the property of Seller. Except for the purposes of executing or applying this report, no part of this document may be copied, stored in a retrieval system or divulged to any other party without written permission. Such rights are reserved in all media.!

Intellectual property rights associated with the methodology applied in arriving at this document, including templates and models contained there in, reside with DCK Holdings Pty Ltd ATF DCK Family Trust, excepting client information it contains that is demonstrably proprietary to the client or covered by an agreement or contract defining it as such.!

No part of this report may be reproduced, transmitted, stored in a retrieval system, or translated into any language in any form by any means, without the written permission of DCK Holdings Pty. Ltd ATF DCK Family Trust.!

© DCK Holdings Pty. Ltd ATF DCK Family Trust. 2012 All Rights Reserved ACN 137 934 386 ABN 60 509 131 934!

!Top 5 political risks for Australia! November 2012!

top 5 political risks for australia nov 2012

Documents