Economic direction set to be altered after polls

Economic direction set to be altered after polls
Mr Abbott (left) listening to Mr Rudd during the People's Forum in Sydney on Wednesday.

AUSTRALIA - The Sept 7 election is set to alter Australia's economic direction, with its two candidates presenting very different views about the path to future growth.

But this is unlikely to matter as much - at least not in the short term - as the fact that Australia will again have a leader with a clear majority.

To be sure, Prime Minister Kevin Rudd and opposition leader Tony Abbott have clashed fiercely on the economy, with Mr Abbott's conservative coalition pledging to repeal taxes and cut spending.

But many analysts believe that no matter who wins, the immediate impact of the election on Australia's currency and growth is likely to be positive because it will finally end a period of political instability in Canberra.

For the past three years, a Labor- led coalition has ruled with a razor-thin majority after the 2010 election produced no clear winner for the first time in more than 70 years.

"After this election, businesses and consumers will know where they stand," chief economist at the Australia and New Zealand Banking Group, Mr Warren Hogan, told The Straits Times.

"There will be more political clarity and not as much manoeuvring with minor parties. That will give a boost to confidence."

Australia has been labelled the strongest economy in the developed world by the International Monetary Fund and unemployment is relatively low at 5.7 per cent. But the Australian dollar and interest rates have plummeted in the past year amid concerns about the impact of China's slowdown and a slowing of Australia's decade-long resources boom.

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