Updated
The Australian economy could get a shot in the arm from the change in prime minister even before Malcolm Turnbull talks policy.
Industry bodies have welcomed the arrival of a PM with a track record in business, and analysts say the former investment banker could lift consumer and business confidence through his popularity with voters and ability to explain the need for economic reforms.
Australian Chamber of Commerce and Industry chief executive Kate Carnell warmed to a promise of more collegiate and co-operative government, and urged Mr Turnbull to undertake reforms to boost productivity and competitiveness.
“We hope to see Mr Turnbull continue with efforts to repair government finances, fix the problems of federation, undertake critical tax reform and advance the cause of free trade,” she said.
Financial Services Council chief Sally Loane echoed the call for reforms, which AMP chief economist Shane Oliver and UBS economist Scott Haslem said now had a better chance of passing due to Mr Turnbull’s willingness to compromise with political opponents.
“The change does nothing to alter the underlying fundamental challenge facing Australia, which is the end of the resources boom and the resultant sluggish economic growth,” Oliver said.
“But it does have the potential to help.”
Oliver said the government under the ousted Tony Abbott had been too easily sidetracked by issues such as Bronwyn Bishop’s expenses and ministerial gaffes.
Carnell warned that business confidence is fragile partly due to the instability of a fourth prime minister in 28 months, but Oliver said Turnbull’s popularity could ease that by making it harder for his own party or the Labor opposition to oust him.
IG market analyst Angus Nicholson said Turnbull could lift sentiment after a raft of figures last week showed consumer and business confidence dipping again.
The Australian dollar has already rallied after Turnbull ousted Abbott as Liberal leader in a partyroom ballot on Monday night.
“Traditionally with conservative pro-finance, pro-business leaders, which I think Mr Turnbull is regarded among the investor community, you often see a boost in consumer and investor confidence,” Nicholson said.
“If it does provide a boost to confidence, that can also boost the real economy.”
Nicholson and Oliver downplayed concerns about Turnbull’s stance on climate change and the implications for policy.
Turnbull had been negotiating with the then Labor government to secure passage of an emissions trading scheme when he was toppled as opposition leader by Mr Abbott in 2009.
Abbott then won the 2013 election on a promise to abolish the carbon tax, which he subsequently did.
“The Abbott government position on climate change even in the business community has been somewhat unpopular,” Nicholson said.
“Big companies like Shell have clearly seen the need to divest into renewables and diversify and invest in clean coal, so I don’t think change on climate policy would be a deal breaker with the business community.
“The key thing is there needs to be proper discussion and consideration. The worst thing they could do would be sudden change.”
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AAP
