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8 Sep 2013
Abbot wins Australian election, pledges to scrap carbon tax
FXstreet.com (Barcelona) - The Liberal-National coalition led by Tony Abbot won Australia’s election over the weekend, with a majority of more than 30 seats in the 150-seat parliament.
Abbot defeated Kevin Rudd's Labour party, which had been dominating politics in Australia for the past 6 years. While the result was expected, the margin of victory was not as wide as forecasts were pointing at.
In 3 years, the carbon tax will be gone
Mr. Abbot has pledged to scrap taxes on carbon emissions and parts of the mining industry, while also making promises to reduce government spending and debt.
As David Rogers and Rhiannon Hoyle from the WSJ note: "BHP Billiton Ltd. (BHP) and Rio Tinto Plc (RIO) were among the most exposed to the Labor administration's tax on "excessive" profits on iron ore and coal production."
Tony Abbott’s finance spokesman Andrew Robb said Australia’s economy and mining sector would receive a boost from the election result: “As of today, the mining boom will be rebooted,” Robb said, adding “We will restore an appetite for risk and investment", after what he believe was an uncompetitive economy under the Labor government.
In his victory speech, Abbott seemed determine to keep its electoral promises, saying: "A government that says what it means and means what it says. A government of no surprises and no excuses. A government that understands the limits of power as well as its potential. And a government that accepts that it will be judged more by its deeds than by its mere words. In three years’ time, the carbon tax will be gone."
Senate's headache
According to Adam Button, Editor at Forexlive: "They key for the Liberal-National coalition will be the Senate vote and that will take some time to sort out. They will likely need to cobble together a deal with the Greens or independents to govern."
What Button outlines above is precisely the main caveat emphasized by Mark Kenny, Chief political correspondent for the Sydney Morning Herald newspaper in Australia, who said: "Tony Abbott's plan to secure a quick repeal of the carbon and mining taxes may prove difficult with Labor and the Greens likely to block the move in the current Senate and a slew of minor party and independent senators set to hold the balance of power in the new chamber."
Australian Dollar reaction
Button added the results of the election should not represent a major boost to the Australian dollar since the outcome was largely priced in. "All other weekend news being equal, look for minor AUD strength because the tail risks of a shock Labor win have been removed and Abbott continued to pledge to kill carbon and mining taxes" Button said.
Abbot defeated Kevin Rudd's Labour party, which had been dominating politics in Australia for the past 6 years. While the result was expected, the margin of victory was not as wide as forecasts were pointing at.
In 3 years, the carbon tax will be gone
Mr. Abbot has pledged to scrap taxes on carbon emissions and parts of the mining industry, while also making promises to reduce government spending and debt.
As David Rogers and Rhiannon Hoyle from the WSJ note: "BHP Billiton Ltd. (BHP) and Rio Tinto Plc (RIO) were among the most exposed to the Labor administration's tax on "excessive" profits on iron ore and coal production."
Tony Abbott’s finance spokesman Andrew Robb said Australia’s economy and mining sector would receive a boost from the election result: “As of today, the mining boom will be rebooted,” Robb said, adding “We will restore an appetite for risk and investment", after what he believe was an uncompetitive economy under the Labor government.
In his victory speech, Abbott seemed determine to keep its electoral promises, saying: "A government that says what it means and means what it says. A government of no surprises and no excuses. A government that understands the limits of power as well as its potential. And a government that accepts that it will be judged more by its deeds than by its mere words. In three years’ time, the carbon tax will be gone."
Senate's headache
According to Adam Button, Editor at Forexlive: "They key for the Liberal-National coalition will be the Senate vote and that will take some time to sort out. They will likely need to cobble together a deal with the Greens or independents to govern."
What Button outlines above is precisely the main caveat emphasized by Mark Kenny, Chief political correspondent for the Sydney Morning Herald newspaper in Australia, who said: "Tony Abbott's plan to secure a quick repeal of the carbon and mining taxes may prove difficult with Labor and the Greens likely to block the move in the current Senate and a slew of minor party and independent senators set to hold the balance of power in the new chamber."
Australian Dollar reaction
Button added the results of the election should not represent a major boost to the Australian dollar since the outcome was largely priced in. "All other weekend news being equal, look for minor AUD strength because the tail risks of a shock Labor win have been removed and Abbott continued to pledge to kill carbon and mining taxes" Button said.