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Top 5 Political Risks For Australia Nov 2012

Damian Karmelich
Damian Karmelich

Political Monitor identifies 5 top political risks for investors in Australia in 2013: 1) policy making will be influenced by short-term politics ahead of the 2013 election, 2) potential leadership changes in the government or opposition could cause uncertainty, 3) the government may call an early election to avoid revealing a budget deficit, 4) new business taxes could be introduced to fund a budget surplus, 5) Western Australia's state election and uranium mining policy presents risks. The report provides analysis of these and other political risks facing the Australian market.

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Political risk in Australia! Five risks to watch in 2013! November 2012! www.politicalmonitor.com.au!
! 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 ! Top 5 political risks for Australia! November 2012!
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! ! Top 5 political risks for Australia! November 2012!
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 鍖rst parliamentary sitting weeks of 2013.! ! Political risk: ! ! !Uncertainty & signi鍖cant policy changes as result of any ! ! ! ! !leadership transition! ! Top 5 political risks for Australia! November 2012!
3. !EARLY ELECTION BUDGET DEFICIT! The Governments 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 鍖scal year the Government may opt for an early election to avoid having to reveal a budget de鍖cit 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 bene鍖t from a stability dividend post the election.! ! Political risk: ! ! !Short-term uncertainty & decision-making paralysis! ! ! Top 5 political risks for Australia! November 2012!
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! ! Top 5 political risks for Australia! November 2012!
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! ! Top 5 political risks for Australia! November 2012!
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 鍖rm. Our analysis provides insight into the implications of political risk for commercial valuations, asset selection, investment decisions, strategic planning and operational decisions. ! ! Top 5 political risks for Australia! November 2012!
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, 鍖tness for a particular purpose, title or non-infringement.! In no event will Seller or its af鍖liates 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 pro鍖ts, 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 speci鍖c terms and conditions that apply to the products or services offered by Seller.! Copyright! Copyright 息 DCK Holdings Pty Ltd ATF DCK Family Trust 2012. This document is copyright and contains con鍖dential 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 de鍖ning 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.! 息 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!

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Top 5 Political Risks For Australia Nov 2012

  • 1. Political risk in Australia! Five risks to watch in 2013! November 2012! www.politicalmonitor.com.au!
  • 2. ! 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 ! Top 5 political risks for Australia! November 2012!
  • 3. 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! ! Top 5 political risks for Australia! November 2012!
  • 4. 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 鍖rst parliamentary sitting weeks of 2013.! ! Political risk: ! ! !Uncertainty & signi鍖cant policy changes as result of any ! ! ! ! !leadership transition! ! Top 5 political risks for Australia! November 2012!
  • 5. 3. !EARLY ELECTION BUDGET DEFICIT! The Governments 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 鍖scal year the Government may opt for an early election to avoid having to reveal a budget de鍖cit 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 bene鍖t from a stability dividend post the election.! ! Political risk: ! ! !Short-term uncertainty & decision-making paralysis! ! ! Top 5 political risks for Australia! November 2012!
  • 6. 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! ! Top 5 political risks for Australia! November 2012!
  • 7. 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! ! Top 5 political risks for Australia! November 2012!
  • 8. 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 鍖rm. Our analysis provides insight into the implications of political risk for commercial valuations, asset selection, investment decisions, strategic planning and operational decisions. ! ! Top 5 political risks for Australia! November 2012!
  • 9. 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, 鍖tness for a particular purpose, title or non-infringement.! In no event will Seller or its af鍖liates 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 pro鍖ts, 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 speci鍖c terms and conditions that apply to the products or services offered by Seller.! Copyright! Copyright 息 DCK Holdings Pty Ltd ATF DCK Family Trust 2012. This document is copyright and contains con鍖dential 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 de鍖ning 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.! 息 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!